Oligopoly
Early tomorrow morning, I will be meeting with the surgeon who operated on me (removed 1 foot of my large intestine - but don't worry, I still have about 4-5 feet of it left) to check my ass. Lately I had to visit my bathroom too frequently. Basically, the brain (my brain) does not understand that there is one foot of colon missing. In any case, I am not looking forward to my doc (lady doctor no less) probing into my anus tomorrow morning. Wish me luck.
Remember that I purchased OIH at $130.31 two days ago; it closed at $139.46 today. Please note that I have placed a limit order to sell at $141.31/sh. When this excutes it will yield +8.4% return in a few days - not bad I'd say. Once in a while, I will take advantage of the market to get a quick return in a few days to supplement my overall portfolio return.
Regular readers know that I love monopoly business (hard to find though). The next best thing is oligopoly (just as powerful - still hard to find). The oligopoly busines that I am interested in is non other than satellite radio services. There's only two players - thus an oligopoly. XM Satellite radio (XMSR) and Sirius Satellite radio (SIRI).
I have made good earnings in XMSR two years ago. XM was my choice between the two all the time. Until Sirius started to really push the business. XM always had more subscribers than Sirius (double actually). XM still have double the revenue but half the market cap. This will not continue. The reason I am interested now is because both XMSR and SIRI came down in price where it looks ripe to pick (didn't I tell you that there's too many bargains out there?).
Check out the two players:
XMSR: $10.88 X 258 million shares = $2.8 billion dollar company. It has $663 million in revenue so it is trading at 4X sales. It has about $520,000,000.00 in cash.
SIRI: $3.92 X 1.4 billion shares = $5.5 billion dollar company. It has $325 million in revenue so this one trades at 17X sales. It has about $721,000,000.00 in cash.
By the way, satellite radio business is real - it is here to stay. This is not a fad. It is like a GPS system in your car. Once you have it - you have to have it - there you have it.
I believe both company will prosper but if you had to buy one, which one?
Would you pay $2.8 billion for $663 million in sales? or pay $5.5 billion for $325 million in sales? Yes, I know that people think SIRI will grow faster than XMSR because of Haward Stern but are you serious? Which would you buy?
I will tell you my pick when I issue a buy signal.
I am definately buying one of these.
Isn't this fun?
P.S: Both of these are potential double in 12-24 months. Nice!
Remember that I purchased OIH at $130.31 two days ago; it closed at $139.46 today. Please note that I have placed a limit order to sell at $141.31/sh. When this excutes it will yield +8.4% return in a few days - not bad I'd say. Once in a while, I will take advantage of the market to get a quick return in a few days to supplement my overall portfolio return.
Regular readers know that I love monopoly business (hard to find though). The next best thing is oligopoly (just as powerful - still hard to find). The oligopoly busines that I am interested in is non other than satellite radio services. There's only two players - thus an oligopoly. XM Satellite radio (XMSR) and Sirius Satellite radio (SIRI).
I have made good earnings in XMSR two years ago. XM was my choice between the two all the time. Until Sirius started to really push the business. XM always had more subscribers than Sirius (double actually). XM still have double the revenue but half the market cap. This will not continue. The reason I am interested now is because both XMSR and SIRI came down in price where it looks ripe to pick (didn't I tell you that there's too many bargains out there?).
Check out the two players:
XMSR: $10.88 X 258 million shares = $2.8 billion dollar company. It has $663 million in revenue so it is trading at 4X sales. It has about $520,000,000.00 in cash.
SIRI: $3.92 X 1.4 billion shares = $5.5 billion dollar company. It has $325 million in revenue so this one trades at 17X sales. It has about $721,000,000.00 in cash.
By the way, satellite radio business is real - it is here to stay. This is not a fad. It is like a GPS system in your car. Once you have it - you have to have it - there you have it.
I believe both company will prosper but if you had to buy one, which one?
Would you pay $2.8 billion for $663 million in sales? or pay $5.5 billion for $325 million in sales? Yes, I know that people think SIRI will grow faster than XMSR because of Haward Stern but are you serious? Which would you buy?
I will tell you my pick when I issue a buy signal.
I am definately buying one of these.
Isn't this fun?
P.S: Both of these are potential double in 12-24 months. Nice!
posted by Jaewoo | 9:32 PM
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