SiriusXM Jumped Today -- Is This Warren Buffett Stock a Buy?

SiriusXM (NASDAQ: SIRI) stock jumped in Thursday's trading after the company published better-than-expected fourth-quarter results. The satellite radio specialist's share price closed out the daily session up 5.8% amid the backdrop of a 0.5% gain for the S&P 500 index and a 0.2% gain for the Nasdaq Composite index.

Sirius published its Q4 results before the market opened this morning, and reported sales and earnings that beat Wall Street's estimates. The company posted earnings per share (EPS) of $0.83 on sales of $2.19 billion, topping the average analyst estimate's call for per-share earnings of $0.71 on revenue of $2.17 billion.

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Notably, Sirius XM is one of just a handful of stocks that has been purchased by Berkshire Hathaway. Should investors be following Berkshire CEO Warren Buffett's lead and snatching up shares of the satellite radio company?

SiriusXM is a better buy than its sales suggest

Sirius's revenue actually fell 4% year over year in Q4, and sales for the full-year period fell 3% annually to $8.7 billion. While the satellite radio market is unlikely to facilitate a return to big sales growth over the long term, the company's earnings picture makes the stock a worthwhile buy.

With the core infrastructure already largely in place, Sirius is in the process of reducing operating expenses and capital expenditures. So it should actually have the opportunity to deliver significant earnings growth, and there are signs that this trend is already taking shape. EPS increased roughly 24% year over year in Q4. While it's unlikely that growth will continue to come in at that level, shares look cheaply valued at current prices.

Even with today's pop, SiriusXM is trading at only 7.3 times expected earnings for the year. With the company making moves to shore up its core satellite business through partnerships with automakers and cost cutting, it looks like Buffett and Berkshire are on to something with this cheaply valued stock. Satellite radio is past its days as a hot growth industry, but SiriusXM should still be able to deliver strong returns.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.