SiriusXM, one of Warren Buffett’s larger portfolio positions at Berkshire Hathaway, has delivered what the Motley Fool calls “lackluster” returns over the last five years. Analyst David Jagielski argues the company is "a value trap more than a compelling buying opportunity."

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SiriusXM, one of the largest satellite radio players in the U.S., has been one of Buffett’s weakest holdings. Its shares have collapsed 59% in five years, Jagielski wrote in a Motley Fool column. In his view, the company has showed “dreadful” results: subscriber losses of about 1 million over the past year and a 2% year-over-year revenue decline in the second quarter to $2.14 billion.

The stock trades at a P/E ratio of 7, which looks cheap. Yet Jagielski warns, it "resembles a value trap more than a compelling buying opportunity."

SiriusXM as a Buffett holding

SiriusXM was created in 2024 after a merger with Liberty Media. Its portfolio includes its core subscription service, Pandora streaming, and a range of podcasts.

Berkshire Hathaway had been a shareholder in Liberty Media since 2016. After the merger, Buffett’s company became a direct shareholder of SiriusXM. In August this year, Berkshire purchased 5 million more shares, significantly increasing its stake to 124.8 million shares, or 37% of the company – equivalent to just over 1% of the Berkshire portfolio.

Morningstar analysts note that SiriusXM is an unusual pick for Buffett, who typically favors companies with a durable competitive advantage. The firm risks losing ground to streaming services such as Spotify, they argue. At first, Wall Street viewed Berkshire’s involvement as a speculative move, but subsequent purchases suggest a longer-term commitment.

What other analysts say

Wall Street is split on SiriusXM. According to MarketWatch data, six analysts rate the stock a “sell,” five a “buy,” and four are neutral. Their average target price is $23.15 per share, just 2% above the last close.

The AI translation of this story was reviewed by a human editor.

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