Technology Penny Stocks Offer Huge Upside in 2016
Investing in penny stocks usually comes with high risk. However, for those who are willing to conduct due diligence, penny stock investing could bring big returns. The technology sector has quite a few companies with solid growth potential and their prices look dirt-cheap. So, let’s take a look at the top technology penny stocks to watch in 2016.
Sirius XM Holdings Inc. (NASDAQ:SIRI)
Sirius XM Holdings Inc. (NASDAQ:SIRI) is a company that provides satellite radio broadcasting services. Sirius creates and broadcasts commercial-free music, premier sports talk, live events coverage, comedy, news, exclusive talk and entertainment, a wide range of Latin music, and talk programming. Founded in 1990, Sirius is now the world’s largest radio broadcaster by revenue and has 29 million subscribers.
Compared to many tech penny stocks, performance of Sirius stock has been quite stable. Despite a moderate dip mid-year, when the U.S. stock market stumbled, Sirius stock has been climbing steadily upward. Year-to-date, Sirius stock returned a positive 17.4%.
The solid performance of Sirius stock is actually quite easy to understand: the company’s growth has been more than decent. In the third quarter of 2015, Sirius XM grew its revenue by 11% year-over-year to $1.17 billion. The bottom line was even better, with net income for the quarter climbing 22% year-over-year to $167 million. Growth in Sirius XM’s subscribers also accelerated. With 525,000 net new subscribers added, the increase was 21% higher compared to the 433,000 net new additions in the year-ago period. (Source: “Sirius XM Reports Third Quarter 2015 Results,” Sirius XM Holdings Inc., last accessed December 2, 2015.)
The company is also pursuing a stock buyback program. Sirius repurchased $533 million worth of shares in the third quarter. In less than three years, Sirius’s stock repurchase program has returned more than $6.0 billion to its shareholders.
The future looks bright for Sirius. The company is on track to meet or beat its best year for net subscriber growth since the merger of Sirius and XM in 2008. Sirius XM also raised its guidance for net subscriber growth, revenue, and adjusted earnings for fiscal 2015. The company expects total net subscriber additions to be approximately two million, revenue to come in around $4.53 billion, and adjusted EBITDA to hit approximately $1.65 billion.