CBS continues to turn in solid earnings despite weakness in the economy. Now may be the time for patient investors with at least a one year time horizon to begin accumulating shares in order to prepare for the ride up that CBS stock should experience heading into the 2012 Presidential Election.
It has been noted that President Obama’s re-election team has set a goal of $705 Million dollars to be in the war chest for this election and many are speculating that this could be the first $billion election in the U.S. This bodes well for CBS.
Being that CBS stock appears to be generally tracking the market, there should be ample opportunity for investors to pick a reasonable entry point. Ignoring the outliers and forgoing the technical acumen needed to call the exact top or bottom of a trading range in a highly volatile market for any given stock, somewhere between $22.00 and $27.00 per share would seem prudent. If there is a market shock in the near future, one may be able get in for less.
CBS’s 52 week high as of November 7th, 2011 is $29.62 per share achieved back in July of this year. Its low for the same time period was $15.99 per share. During the fall selloff, the stock only retraced back to $18.95 per share on October 3rd.
CBS has turned in earnings surprises for the past four quarters, and one can expect this continue given the upcoming election. CBS’s earnings are expected to grow over 19% per annum over the next five years. Should the market get behind this stock during that time frame, CBS could be in for nice leg upwards.
On a side note; for the speculator, the thinly traded ETF PBS may offer an interesting play for the upcoming election.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Additional disclosure: I am taking a closer look at PBS for a possible profit vehicle for the upcoming election play.