Sirius XM(SIRI) The Motley Fool·2025-04-07 08:45Core Insights - Warren Buffett's investment strategy focuses on identifying undervalued stocks, which has historically generated significant wealth for Berkshire Hathaway shareholders, even during economic uncertainty [1] - Current market conditions have led to some Berkshire-held stocks trading at attractive valuations due to concerns over tariffs and economic impacts [2] Company Analysis: SiriusXM Holdings - Berkshire Hathaway owns over 117 million shares of SiriusXM Holdings, which has seen a decline in stock price following a slight drop in revenue and subscribers [3][4] - Despite a subscriber decline of 296,000 last year, SiriusXM added 149,000 subscribers in Q4, indicating potential recovery [4][7] - The company has a strong dividend yield of 5% and a low payout ratio of 14% of free cash flow, allowing for a 1.5% increase in quarterly dividends [5][6] - SiriusXM's business model benefits from recurring revenues from approximately 33 million subscribers and has expanded its market by launching services in electric vehicles [5][6] - The company generated 1.1 billion, making the stock appear undervalued at 7.6 times trailing-12-month free cash flow [6][7] Company Analysis: Constellation Brands - Berkshire Hathaway has recently initiated a position in Constellation Brands, which has seen its stock price drop 18% year-to-date, resulting in a high dividend yield [8][10] - Constellation Brands benefits from strong sales of popular Mexican beer brands and has a diverse portfolio that includes high-end wines, reflecting strong pricing power [9][10] - The company generated 10.2 billion in revenue last year, with a forward dividend yield of 2.22% [10][12] - The stock is currently trading at 13 times this year's earnings estimate, below its five-year average free cash flow multiple of 26, presenting a buying opportunity [11][12] - Long-term demographic trends favor Constellation, with increasing sales from new legal-age drinkers and a growing Hispanic population [12]