Ask Matt: Should I sell my Sirius XM Radio shares?

— -- Q: I own Sirius XM Radio stock and have had it for five years. Should I sell and just cut my losses?

The idea of collecting lucrative monthly subscription fees from legions of radio listeners is compelling. The company's deals with automakers to install Sirius XM equipment in cars make the service front and center with investors.

Ask Matt readers have long been infatuated with Sirius XM Radio in addition to the predecessor companies, Sirius Satellite and XM prior to their merger. I have been cautioning readers for years to avoid this stock. As long ago as Jan. 28, 2008, Ask Matt readers read this about Sirius Satellite:

"Unless you have money you can afford to lose, avoid this stock. There are some big wild cards that could change the analysis — most important, whether regulators allow Sirius and its only rival, XM Satellite Radio to merge. You have to wonder, though, how much that will help. As an investor, you can do better."

Investors have been suffering through disappointing results since that warning. Shares of Sirius XM, based on historical price quotes, traded for $3.08 on Jan. 28, 2008. Today, those shares are worth $2.10, or a 32%, decline.

Fundamentally, the company has made some progress. During the 12 months ended Dec. 31, 2011, the company posted net income of $427 million on revenue of $3 billion. However, at the same time, growth has been slowing.

Investors who have endured living through this stock must have incredible patience. The stock has delivered bruising volatility with very low returns, losses in fact. But bailing out on the stock just as it's about to recover would be doubly painful.

Even so, Sirius XM is just not a great stock for most people. You can do better.

For investors who would like to dig deeper, they could examine the present value of the cash the company is expected to generate over its lifetime. This analysis, known as discounted cash flow, shows the stock is "dangerous," according to New Constructs, a data analysis firm.

If you're a gambler willing to suffer another loss, then you might hang on. It's hard to recommend this, though. Most investors will be best seeking a stock that generates better gains commensurate to the risk and with a more compelling valuation.

Matt Krantz is a financial markets reporter at USA TODAY and author of Investing Online for Dummies and Fundamental Analysis for Dummies. He answers a different reader question every weekday in his Ask Matt column at money.usatoday.com. To submit a question, e-mail Matt at mkrantz@usatoday.com. Follow Matt on Twitter at: twitter.com/mattkrantz