Sirius XM Holdings (NASDAQ: SIRI) might not be the first pick for many investors these days, but Warren Buffett sees something others don’t. In the second quarter, his firm, Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), made a few changes to its portfolio, with one standout move: a significant increase in its stake in Sirius XM. This shows Buffett’s confidence in the satellite radio company’s future, even as others may overlook its potential.
According to a recent SEC filing released after the market closed on Wednesday, Berkshire Hathaway now holds 132.9 million shares of Sirius XM, a sharp rise from the 36.7 million shares it owned just three months earlier. This bold move translates into nearly $400 million invested in Sirius XM, highlighting the growing appeal of the company to Buffett’s firm.
Although Buffett hasn’t publicly explained his reasoning, the decision to boost Berkshire’s stake in Sirius XM, one of the portfolio’s weaker performers this year, is certainly catching attention. The details were revealed through a straightforward regulatory filing, lacking the personal insights often found in Buffett’s letters to shareholders or his talks at the annual shareholder meeting. While the exact motive behind this move remains unclear, it’s significant enough to fuel speculation and discussion among investors.
Following the news, Sirius XM shares surged 8% on Thursday morning, though the company is still down more than 40% in 2024. In the second quarter, Sirius XM reported a 3% drop in revenue—its second-worst decline in 30 years. Only the 5% drop during the pandemic-hit second quarter of 2020 was worse. Despite this, Buffett began accumulating shares during this period, signaling his belief in the company’s long-term potential. Sirius XM released its latest financial results earlier this month.
This move is particularly interesting in light of actions by another billionaire, media mogul John Malone, the largest shareholder of Sirius XM. Investors can gain exposure to Malone’s controlling stake through Liberty Sirius XM Group (NASDAQ: LSXMA) tracking shares. Although these tracking shares have typically been overlooked by investors, Buffett’s interest might bring them into the spotlight.