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An interesting and well-known media company in our Clear Spin-Off index (of which my firm is the publisher and which is investable through the Claymore/Clear Spin-Off ETF (NYSEARCA:CSD)), is the CBS Corporation (NYSE:CBS).

Created in 1928 as a network of 16 radio stations, the company has grown to encompass broadcast television stations, a local television group, cable television, television production and syndication, consumer book publishing and distribution, advertising, digital media, and consumer products. The company merged with Viacom in May of 2000 and the joint company split back into CBS and Viacom Inc (NASDAQ:VIA) on December 31, 2005.

Being a historic contributor to the evolution of all forms of modern media throughout the twentieth century, and once known as the "Tiffany Network," the company continues to adapt to the times. In 2006 alone, the first year of its spin-off from Viacom, CBS set an augmented course to expand on the internet by partnering with Google Inc. (NASDAQ:GOOG). As Google Video's leading supplier, it was: the first company to provide prime-time programming for a fee on its website, with episodes of "Survivor" on cbs.com; the first U.S. based company to provide breaking news and entertainment news to wireless devices; and it was responsible for launching a free broadband internet channel supported by advertising (cbs.com/innertube).

In addition, last year CBS was the first to appoint a female as solo anchor of a network evening news broadcast, the first to provide network television marketing through free clips that can be downloaded onto mobile devices directly at certain CBS billboard locations, and it created partnerships with online giants YouTube, Inc. (now a subsidiary of Google) and Yahoo! Inc. (NASDAQ:YHOO).
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With a market capitalization of $24.37 billion and revenues of $14.65 billion, CBS has created a solid foundation for itself. With all of the new internet exposure it has been investing in, not to mention the costs of separating from Viacom, the company had initially seen setbacks in its financial performance. There are still, however, some positive signs of potential blossoming for the firm. For instance, a bleak return on equity [ROE] of 35.24 includes goodwill impairment charges in radio and TV of approximately $9.5 billion. Excluding the charge would yield an ROE closer to 11%.

Revenue growth seems to be returning, with year over year quarterly revenue growth for the last quarter at 0.20%. As this week's Barron's points out, there are potential new revenue sources syndicating content which could add directly to the bottom line.

Taking its newfound independence into consideration, our algorithms indicate that the stock may ultimately be a profitable investment. This is seen in CBS's small price to book [P/B] value of 1.05. Even so, since the company has not released financial information for its first full year of operation (the 2006 calendar year) after spinning-off, investors are not jumping on the bandwagon just yet. In the meantime, joining us to keep a big eye on this mammoth media spin-off are 17 sell-side and independent analysts. With that spotlight, any positive movement in its fundamentals should get the attention it deserves.

Disclosure: CBS Corporation [CBS], is a constituent in the Clear Spin-Off index licensed for the Claymore/Clear Spin-Off ETF [AMEX:CSD]. Mr. Corn is CEO and founder of Clear Indexes LLC which publishes the index and he owns shares of the ETF: CSD. He does not directly own shares in [CBS].

CBS 1-yr chart

cbs chart

Source: CBS Deserves the Spotlight