CBS: Better Income, Cash Flow in Q1

But, oh how the risk of buying at the top end of a range is sometimes great; you just never know when some macro event is going to come along to ruin a trading/investing thesis. This has been the theme of my recent articles, and I have a feeling it's going to continue to pop up for some time to come.

If CBS falls further (and I think it might), I believe it will start to become attractive on a valuation basis. Looking at the first-quarter release, I am impressed by the improvements in both income and cash flow. An adjusted 5 cents per share of positive profit compares most awesomely to a loss of 5 cents per share in the year-ago period. And whereas a small amount of cash was used to fund operating needs previously, $700 million was generated in the last three months.

Of course, the big story for CBS is the dividend. Remember when this was a media stock with a great yield? Those days are gone for now. When management is confident enough to increase the payout, there will be many buy orders sent in for the business. An item over at The Hollywood Reporter highlights a question raised about the dividend; unfortunately, in my opinion, I don't think you can interpret the answer as a justification for income investors to buy just yet.

Bottom line: I would wait for a further drop in shares of this company before making a move.

Disclosure: I own Disney, GE; positions can change without notice.