4 Stars For The Network That Brought You "Two & Half Men"

CBS

continues to deliver solid, if not spectacular results and this quarter is no exception, with Les Moonves' team continuing to find new ways to monetize old content. With the NFL coming back,

and

the company has been a cash cow, and the stock price is reflecting that. The company reported second quarter earnings of 58 cents per share on $3.59 billion in revenues. Wall Street was expecting earnings of 45 cents per share on $3.55 billion in revenues. The company also reported much stronger than expected Operating Income Before Depreciation And Amortization (OIBDA), reporting $873 million in OIBDA versus the Wall Street estimates of $763 million. As such, there were a slew of price target raises this morning, and even some upgrades from across the sell side. Benchmark Capital, Piper Jaffray, and Goldman Sachs, and Bank of America along with a few others, raised their price targets. Goldman Sachs raised its price target to $29. Lazard is the high on Wall Street with a $38 price target on shares. Larry Haverty, portfolio manager at Gabelli & Co. was on CNBC before talking about the quarter and its ability to deliver strong free cash flow and excellent returns on its proprietary content. Despite today being the ninth down day in a row for the broader equity markets, CBS is bucking the trend, up slightly, after moving sharply lower approximately 60 minutes into trading when it appeared as if we were going to plunge sharply again. "Our extraordinary second quarter results demonstrate the power of the strategic actions we've taken to strengthen our business model," said Moonves in the press release. He went on to say, "We delivered stellar growth across every single key financial metric, nearing record levels in all profit measures. These remarkable results reflect our increasing ability to monetize our content, while at the same time, diversifying and de-risking our Company for the future, including recent new licensing deals with leading online video distributors. In addition, we led the marketplace in another highly successful Upfront selling season, setting us up for strong advertising growth next year. Meanwhile, we continue to generate very healthy free cash flow and return an increasing amount of value to our shareholders through our ongoing share repurchase program and recently increased dividend. Going forward, positive trends and new developments in our industry position us to deliver strong results not only for the balance of the year, but in 2012 and beyond as well." With deals with Netflix both domestically and

CBS has continued to been able to generate incredible amounts of strong free cash flow. This should lead to a potential increase in the dividend, (1.5% yield currently), as well as potential further share buybacks. Not bad for a network that was once

and Charlie Sheen nearly tried to bring down with his wild antics.

Traders who believe that CBS will cotinue to monetize old content and generate strong free cash flow might want to consider the following trades:

Traders who believe that CBS will not generate the near 60% margins on its old content anymore may consider alternate positions: