Over the years, my fellow traders have tried to get me excited about SIRI (XM Siri Satellite Radio), and allow me to say that I use the service in my car when I am traveling, and I love it!
But when it comes to SIRI, the stock, you will rarely ever hear me mention it and that’s because
the stock fails to meet one of my main criteria for stock selection
which is the size of the FLOAT.
SIRI has a float of 3,680,000,000
shares (that’s 3.68 billion for those who are mathematically
disinclined!) available to trade…and insiders hold less than 1% of the
It’s been my experience over the years that
big money is unlikely to be made in stocks with more than about 800
million shares….even 800 million is too high for my standards unless
it’s a popular stock among traders or has good insider or mutual fund
support, like possibly AAPL has.
High float stocks tend to stay
mired in a sideways trading channel for years and will rarely ever
deliver out-sized gains like I’m looking for. History is riddled with
these high float stocks that under-perform. Take a look at examples like
C, CSCO and BAC which are three that comes to mind right away, but at
least they seem to have some decent mutual fund support….still,
outside of BAC a little, none of these three stocks really attracts my
And SIRI is one of the best examples….3.7 billions
shares and very little insider holdings makes this one DEAD money in my
humble opinion. The stock has been mired in a trading channel for years
pretty much around that $2 level….sure, it might reach $2.50, but then
I would love to see SIRI do at least a 10-1 stock
split…get the price up over $20 and cut that float down to under 400
millions shares….then you might see the mutual funds start to buy it
up and drive the price higher???