Yes, satellite provider Sirius XM Radio (NASDAQ:SIRI) is in a tough spot since terrestrial radio remains pretty entrenched and streaming radio from companies like Pandora (NYSE:P) continue to gain momentum. But don’t count SIRI out yet.
In its latest earnings report, despite a lower bottom line that missed earnings targets, it posted continued subscriber growth and revenue growth that beat the Street. The problem of consistent profitability remains a weight on shares, but it’s important to understand that revenue continues to climb — this is hardly a company with its best days behind it. It’s up about 50% year-to-date in 2012.
What’s more, it’s important to remember that a big driver of growth (pardon the pun) for SIRI is the packaged sale of Sirius XM access with new vehicles … and incremental improvement in the auto industry means a boost to subscribers.
Though perhaps a bit overbought in the near term as it hovers near four-year highs, Sirius XM stock could be a nice buy on a pullback. And a bonus is that unlike some of the other picks on this list, SIRI is very liquid and trades millions of shares daily, so you won’t be exposed to low-volume volatility.