According to data disclosed by the US Securities and Exchange Commission (SEC), Berkshire Hathaway, a subsidiary of Warren Buffett, bought approximately $86.73 million worth of shares in satellite broadcasting company SiriusXM (SIRI) from October 9th to October 11th, with four purchases totaling 3.56 million shares. Combined with its existing holdings, Berkshire Hathaway now owns 108.7 million shares of the company, bringing its shareholding ratio to 32%.
Recently, after consecutive sell offs, Berkshire Hathaway has reduced its stake in Bank of America to below 10%.
Why did Buffett increase his holdings in this media stock while reducing his position in the US stock market? Some analysts believe that Buffett may have been interested in the arbitrage opportunities after the restructuring of the stock. In September of this year, billionaire John Malone's company Liberty Media merged with stocks related to SiriusXM, and since then Berkshire Hathaway has increased its bet on SiriusXM.
According to the data, Buffett's company first purchased tracking stocks of Liberty Media in 2016 and then purchased tracking stocks of SiriusXM in the first half of 2024.
In addition, SiriusXM's current trading price is at a historical low, with a P/E ratio of around 8 times and a dividend yield of over 4%. Barron's Weekly has recently given a positive review of the company, stating that its valuation is low, but there are also some Wall Street analysts who hold a negative view of the stock.
Last week, JPMorgan analysts resumed coverage of SiriusXM and set a target price of $20. Morgan Stanley analysts have stated that due to SiriusXM's focus on debt reduction, the original stock repurchase plan may not resume until 2027.