Berkshire Hathaway bets on Sirius XM: A golden investment?

Last month, it was mentioned that, given a price-to-cash-flow ratio of 10 and a dividend yield of about 4.3%, the arguments for purchasing Sirius XM Holdings shares are becoming increasingly compelling. Additionally, the company plans to buy back shares worth $1.2 billion. Recently, Berkshire Hathaway disclosed to the U.S. Securities and Exchange Commission (SEC) that it acquired 3.6 million Sirius shares between October 9 and 11. As a result, Berkshire now holds 108.7 million shares, representing an impressive 32% of the total company stake. Interestingly, data from S&P Global Market Intelligence shows that Berkshire directly owns about 6.6% of Sirius shares, while an additional 25.5% is held by New England Asset Management, a subsidiary of General Re Corporation, which is in turn part of Berkshire. Warren Buffett seems to have great confidence in Sirius's potential. But should one share this assessment? Since the first recommendation was made a month ago, Sirius shares have gained nearly 20%. The stock has an attractive price-to-earnings ratio of only 7, with analysts forecasting an annual earnings growth of 12% over the next five years. Certainly, Sirius's significant debt poses some risks, as the enterprise value is about twice the apparent market value. Nevertheless, the free cash flow exceeds the reported net income, resulting in an enterprise value to free cash flow ratio of 15. With a projected growth rate of 12% and a generous dividend yield of 4.3%, Sirius remains enticing for potential investors. Do you feel like you missed the opportunity to invest in the most successful stocks? Then listen closely: Our experts have issued a "Double Down" recommendation for three great companies on the verge of an upswing. Now could be the ideal time to invest before the opportunity passes by. Rich Smith holds no positions in the mentioned stocks. The Motley Fool holds positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.