Does Warren Buffett know something Wall Street doesn’t? The billionaire has been buying split shares on the Nasdaq for a hefty 4.6% yield, which analysts recently cut.

Berkshire Hathaway Chairman Warren Buffett is a value investor at heart. Value investing involves finding stocks that are trading below their intrinsic value and buying them at a discount. While this concept often seems like a no-brainer, value investing is much harder than it seems because many stocks are on sale for a reason. Investors will wrestle with whether a stock is truly valuable or a value trap.

One stock in Berkshire’s portfolio found itself in the middle of this very argument: Sirius XM Holdings (NASDAQ:SIRI). The digital audio company’s shares are down nearly 58% this year, and some Wall Street analysts recently downgraded it. Despite Sirius’s difficulties, Berkshire has been buying shares all year. He does Warren Buffett Do you know something Wall Street doesn’t?

Let’s take a look.

Sirius operates Sirius satellite radio and the Pandora music streaming service. Earlier this year, the company spun off Liberty Media, in an attempt to simplify its corporate structure, and also conducted a 1-for-10 reverse stock split to make its stock more attractive to investors. The company also embarked on a New strategy This includes building its podcast platform by purchasing exclusive distribution rights and ad sales from big brands like Call Her Daddy and Smartless.

The new strategy caught the attention of Buffett, who loves a good turnaround story. It also doesn’t hurt that Sirius pays a hefty 4.6% yield and is considering a stock buyback. This allows investors to collect passive income while the company executes its turnaround story.

However, Sirius had recently proven that most transformation stories required patience. The company provided a strategic update and updated guidance for 2025. Sirius expects next year’s revenue to be about $8.5 billion, below previous analyst estimates. This would represent a decline from projected revenue for 2024 which is concerning because the company has seen subscriber numbers decline at times this year.

In its strategic update, Sirius also said it was targeting $200 million in savings by the end of the year and an additional debt reduction of about $700. Management also said it was committed to maintaining the company’s profits.

The updated guidance prompted several downgrades from analysts, who also lowered their price targets, citing headwinds from disappointing guidance and subscriber trends. In many cases, companies attempt to implement a radical turnaround if they cannot demonstrate the ability to increase revenues and profits because investors doubt the strength of the underlying business.

The story continues