Sirius XM (NASDAQ: SIRI) is a Berkshire Hathaway holding: The Warren Buffett conglomerate owns 37.1% of the company’s outstanding shares, so the Oracle of Omaha might see something he likes about the company.<\/p>\n
Berkshire’s apparent endorsement, though, doesn’t change the fact that Sirius XM’s share price has dropped by 59% over the past five years. Its valuation<\/a> is now quite cheap, at a forward price-to-earnings ratio of 7.4 — which might pique the interest of some investors.<\/p>\n But is there a future for Sirius XM?<\/p>\n Sirius XM is the only satellite radio operator still in business. However, it has faced major headwinds thanks to the advent of high-performance smartphones and better internet connectivity. The company’s subscriber base and revenue have not\u00a0grown meaningfully for years.<\/p>\n Meanwhile, popular audio streaming services from Apple, Spotify, Alphabet, and others have achieved tremendous success. This isn’t going to change.<\/p>\n It’s smart for investors to put their money into businesses benefiting from secular trends<\/a>. Technological shifts can provide a long-term boost to such companies’ customer, revenue, and earnings growth. <\/p>\n Unfortunately, Sirius XM doesn’t fall into this category. Yes, its shares are cheap, and it produces positive free cash flow, but the company faces a difficult road ahead. Would-be investors should proceed with caution. <\/p>\n Before you buy stock in Sirius XM, consider this:<\/p>\n Image source: Getty Images. <\/p>\n