Dorfman: CBS' Valuation 'Profoundly Attractive' (CBS)

CBS Corp. (CBS) makes portfolio manager and Bloomberg columnist John Dorfman's annual "Do-Nothing Club."

Yes, that's a good thing:

My next recommendation, CBS, may strike some people as buggy-whip investing. Aren't the networks inexorably losing market share to cable television year after year, and facing new competition from Internet services?

Yes, they are. CBS's revenue was $14.5 billion in each of the past two years -- far below the peak of $24.6 billion hit in 2002. Earnings at the New York-based company have been negative in five of the past eight years. I believe, however, that CBS's stock price already reflects all of these woes. At less than $26, it fetches less than half of its peak price, which was almost $56 in August 2000.

CBS shares sell for only 0.9 times book value (assets minus liabilities) and 1.04 times revenue. Those are ratios I find profoundly attractive.

CBS 1-yr chart: