March 28, 2007: One stock tidbits:CBS

CBS Corporation (CBS) is in my portfolio(s). Only ego would assume that one blogger would make this large media company stock either rise or fall.

I really like CBS prospects.

First, it is well managed.

Second, CBS will have $2.9B in cash by year's end, despite returning $2.1B of capital to shareholders over the upcoming calendar year. This future cash is incremental to the company's regular quarterly dividend payments and the already completed $1.5B accelerated share repurchase plan.

Third, likely options to spend the excess cash are share repurchases, online content acquisitions,advertising acquisitions or a management-led buyout.

It seems that investors' primary concern is that CBS may use the cash to make a dilutive acquisition, as have other media companies. I do not believe this to be realistic based upon the high quality of management and their desire to maximize shareholder value.History means something.

CBS has, according to one respected analyst, a "rich man's problem". I like this problem!

It is probable the stock may be worth $40.00/share using any of the four likely scenarios. Maybe more, if management would like to own the company outright.