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Several months ago, World Wrestling Entertainment (NYSE:WWE) was at a crossroads. After suffering a disappointing quarter headlined by their current failures in the film business (including a $15.7 million dollar impairment charge) and the death of one of their most prominent wrestlers, WWE has had to grapple with not only investors, but the media, fans and politicians.

With Congress breathing down its neck and the Albany DA asking for documents about online steroids sales, WWE had to take action. In late August, WWE complied with Congress by providing all documents about current wrestlers and their connection to the "Signature Online Pharmacy" case. The wrestlers who were involved were given suspensions of between 30 and 60 days, had their titles taken away, and were removed from current storylines. This was the first time WWE publicly suspended wrestlers for using performance enhancing drugs. It is unclear how effective this policy has been in preventing steroid use by WWE talent, however it is instrumental in once again gaining the publics' trust in the company and its product.

In the past few weeks alone WWE has made some important strides to ensure earnings and growth in the coming quarters. The first of these moves was to appoint a new president of WWE Films, Michael Lake. Lake has 36 years of experience in the movie business and has worked on some very successful projects in the past including the lucrative Matrix trilogy. With this move, Vince McMahon is hoping to reinvigorate the fledgling WWE films division and convince doubtful investors that WWE's future is no longer in question.

Over the summer, WWE took a large risk by recreating the once successful Extreme Championship Wrestling brand and televising it for a limited time on NBC Universal's Sci-Fi channel. This was a risk by both Sci-Fi and WWE as neither company knew how well the show would perform. Despite the uncertainty, the show boosted Sci-Fi into the 1st position for men ages 18-34 during ECW's timeslot and helped the network gain exposure in other areas. Thus the answer came this past week when negotiations between WWE and Sci-Fi yielded a new contract to bring the ECW brand back to the Sci-Fi channel through 2008. This was an important step for WWE as it now has three of the most watched shows on television on three very different channels.

Since hitting a 52 week low near $13.50 in August, WWE's share price has rebounded nicely. Currently trading around $15 a share, I can see WWE reaching near $17 if earnings next week beat estimates. That is the question: can the WWE beat earnings and rebuild itself after its troubled last quarter? I think so. With revenues set to come in from its mildly successful feature film "The Marine" and licensing and media growth destined to reach new levels, it may be a good time to invest a few bucks in a nice dividend yielding stock like WWE.

Disclosure: Author has a long position in WWE

Source: World Wrestling Entertainment: Is The Worst Over?