One of the standouts of today's evening trading session has been Sirius XM, which logged a -7.6% drop and underperformed the S&P 500 by -7.0%. The Broadcasting stock is now trading at $3.99 per share and is -19.07% below its average target price of $4.93. Analysts have set target prices ranging from $3.5 to 7.0 dollars per share, and have given the stock an average rating of hold.
With a short interest of 27.2%, we can infer that the market sentiment on Sirius XM is negative. Each short position represents an investor's expectation and hope that the stock's price will reverse its present course and start falling.
When a stock is sold short, it means an investor has borrowed shares of the stock from their broker, and then sold them at the going market price. The investor hopes for the price to decline, so that they might buy those shares back at a lower price in the future. Once they do, they can return the borrowed shares to their broker, and keep the profit they made on the transaction.
We can make inferences about the market sentiment surrounding Sirius XM by analyzing its rate of institutional ownership. If institutions such as hedge funds and pension funds are the primary shareholders of a corporation, it most likely means that its shares are a good investment according to those institutions' analysts.
At 12.9%, the rate of institutional ownership is average, indicating that a sufficient number of institutions have concluded that it is a stable investment. Beware, however, that the rate of institutional ownership could also indicate an ongoing proxy battle or takeover attempt -- so you should also periodically check the news about a stock whose institutional ownership you are tracking.
Overall, there is mixed market sentiment towards Sirius XM because of an analyst consensus of some upside potential, a hold rating, an unusually large proportion of its shares sold short, and a very small number of institutional investors. Investors should not base their decisions on market sentiment only, they should also be aware of a stock's fundamentals before committing.
At a glance, here are some essential statistics you may want to know about SIRI:
-
It has trailing 12 month earnings per share (EPS) of $0.3 per share
-
Sirius XM has a trailing 12 month Price to Earnings (P/E) ratio of 13.3 while the S&P 500 average is 15.97
-
Sirius XM is a Consumer Discretionary company, and the sector average P/E and P/B ratios are 22.33 and 3.12 respectively
