By Brandon Matthews
The anticipated recovery in the automotive sector may be underway. This is imperative for Sirius XM Radio (Nasdaq:SIRI), as worries over the projected Seasonally Adjusted Annual Rate (SAAR) halted an exceptional run last month over concerns of weakness in the sector. Most analyst projections assume a SAAR rate of between 10-11 million units.
Edmunds.com is reporting that the first eight days of March have brought with it a surprising rise in the SAAR rate of U.S. auto sales. Last months 10.3 million rate is now being dwarfed by a spike to 12.5 million units, primarily resulting from incentives offered by GM and Toyota (NYSE:TM). This is the highest reported level since September of 2008, excluding the cash for clunkers program during August of last year.
Senior Analyst Jessica Caldwell expects that the rate will cool down to approximately 11.3 million by the end of March. This represents a one million unit increase from February. With an average penetration rate of nearly 50%, and a take rate of nearly 50%, this represents nearly 250,000 new Sirius XM subscribers in 2010 than the February numbers would have indicated.
Toyota it seems was the biggest winner thus far, yet news of runaway Toyotas had not hit the wires until after this data was compiled. Edmunds reports that “Toyota’s daily retail sales rate in the first eight days of March was about 47 percent higher than last March and 71 percent higher than February.” The article goes on to state that Toyota had regained some of its lost market share, which increased to about 16.8 percent in early March. That is up significantly from the 12.8 percent reported in February, yet likely to decline in the wake of recent news.
Chevrolet’s retail share increased slightly, while Ford’s (NYSE:F) share decreased slightly over February. Edmund’s also reports that GM is ramping up production of its best selling models.
The big winner of the OEM recovery will be Sirius XM, as analyst growth projections are based in part on the SAAR rate of U.S. auto sales. With increases in the SAAR rate, come projected increases to Sirius XM’s bottom line. In some cases these numbers affirm the current models, in other cases these numbers exceed them, which results in higher price targets and more bullish positions.
Satwaves Radio will present an interview with Edmunds Senior Analyst, Jessica Caldwell on Wednesday, March 24th. Jessica will offer a preview into Edmunds’ March forecasts, which are due to be released on March 25th.
Position: Long SIRI
great news Brandon!
however, the SP is showing the obvious signs of manipulation,,, a lot of it, no doubt, to do with the MM’s keeping it down so the March options expire worthless,,, what a joke,,, this is so F’n frustrating,,,
so, i’m watching fast money and they’re all talking about the consumer doing better and March will show that they are spending and the economy is doing better than expected,,, hmmm is that why siri is trading below $1,,, WTF,,, this isn’t right,,, the SAAR rate will be fantastic for March, IMO, the number by Edmund’s Senior Analyst, Jessica Caldwell is conservative, it will be blown away,,, SIRI should be trading at least at $1.15 right now.
Manipulation? What’s that?
I’m with you! The SEC doesn’t get it. It is obvious that it’s being manipulated on many levels, and they are not doing anything to stop it. The reason they didn’t go after Bernie was because he had to many connections and his downfall would have had political ramifications.
Well, the same is true with CNBC/Cramer/TheStreet.com. It is obvious that the SEC is afraid to go after big fish. It’s politics as usual. Don’t touch the big guys, just go after little fish.
Shame on the SEC for allowing Cramer to be on TV. Nobody should be allowed to send out “News” stating that it would be best to Short SIRI. It’s evil. His connection to TheStreet.com should be heavily investigated, as countless articles have come out for the sole purpose to drive the PPS down.
The article from Wunderlich has STILL not been addressed by the SEC, and it’s outrageous that analysts are allowed to release ‘NEWS’ articles when they are based on LIES. The timing of the article was 100% Manipulation.
Enough said. The SEC is asleep at the wheel.
” A recovery to a 12 mm vehicle run rate implies a near $1.85 target”…a quote from Wundbuttlich’s last update.
Will he now come out and upgrade after the news of the increased runrate?
This is GREAT news. I’m willing to bet some how this will be spun, nothing surprises me any more after that nonsense manipulation last month I can already see it now…….. “Wunderlich Security has downgraded Sirius XM from HOLD to SELL due to a much better than expected SAAR rate, which may lead to more cars on the road & a increase in traffic, which will lead to more people being fired for being late to work, which will lead to less jobs & more customers not being able to pay for subscriptions”