About XMSR

A friend is wading into the waters. He's young enough that he can withstand pullbacks in the market, and he's entering with "play money" outside his retirement fund. I envy him and worry for him at the same time. Why?

He's interested in XM Satellite Radio. Hmm, I say. I have never wanted to buy this stock. All I know is that the future of this company is heavily dependent on the higher court's looming decision about the merger proposal with Sirius. Either way, how will XMSR survive with $1.5 billion in debt?

I asked my pal this question, and he seemed ambivalent about fundamentals. He's a big baseball fan, and XM's ties to Major League Baseball is all he focuses on. We went over some details, like the subscriber numbers, rate of growth, etc. I don't know if he was really listening. But with so many quality growth stocks, I would not venture into XMSR. If I were to step into a stock with large potential, it might be Hoku Scientific. Crocs has been beaten down to a pulp. lululemon athletica is only in the baby steps of its growth. All are risky as hell, but I'd be more comfortable there than in XMSR.

Of course, if XM and Sirius merge, there's the issue about hardware, and how to make it all compatible. But that's down the road. Anyone buying XMSR now, in the 12s, is rolling the dice. If I were bullish on XMSR, I'd wait until it dips under 11 again. Of course, there are bulls out there. Rick Aristotle Munarriz is among them.

Munarriz: XM and Sirius will beat the market in 2008, deal or no deal