There is a saying in the media that “content is king,” meaning if you produce entertaining and useful material for your audience, then the money will follow.  

Yet, if a company is not actively engaged in making money, then all the content in the world will not make it a success. 

Case in point: King Digital Entertainment (NYSE: KING) plummeted 23% on Aug. 13, when the social game maker reported disappointing second-quarter results and cut its 2014 outlook. Despite having some of the most popular games on the Internet, including the Candy Crush Saga, the company is struggling to generate revenues.

Or consider Yahoo (NASDAQ: YHOO), which was the leader in quality content but could not figure out a way to monetize it. The shares went nowhere for more than two years until Marissa Mayer took over as CEO in July 2012.

#-ad_banner-#Mayer led the charge to monetize mobile through targeted advertising and strategic acquisitions. Investors liked the new emphasis on making money, and the shares have surged more than 160% since she took over.

Monetization of content is especially important for the old-guard media companies. In particular, the broadcast television industry has been under pressure over the past few years as it competes against new ways to stream and watch entertainment. 

While some broadcasters are struggling with how to make money off of their content, one company stands out from the pack.

Show Me The Money!

CBS Corporation (NYSE: CBS) has one of the strongest production studios in the industry and is regularly able to create top-rated shows like “NCIS” and “The Big Bang Theory.” These shows, and other popular series, generate sales across multiple platforms including first run, syndication, online and DVDs.

The company is adapting to the new ways we watch video. For example, it began immediately monetizing its “Under the Dome” series last year when it sold on-demand rights to Amazon.com (NASDAQ: AMZN), which paid close to $1 million per episode. It is doing the same with its new summer 2015 show, “Zoo,” which Netflix (NASDAQ: NFLX) purchased the rights to air once the season is completed. CBS has also signed a large international syndication rights deal for a NCIS spin-off premiering this fall.

Not only does CBS have a strong focus on monetization, management is strategically active with acquisitions and asset sales. Over the past several years, the company has divested non-core businesses to focus on higher growth segments. It recently completed its disposition of its billboard business, CBS Outdoors Americas (NYSE: CBSO), and has plenty of opportunities for spin-offs or sales that can unlock shareholder value.

Shares of CBS trade for 17.1 times trailing earnings, slightly below the industry average of 17.6 and well below the company’s five-year average of 22.3, according to Morningstar. 

Zacks consensus estimate is for earnings of $3.31 per share this year and $3.95 next year. That gives CBS a P/E of just 13.4 times expected earnings. 

Given the company’s low forward valuation and ability to monetize great content, I would be happy to own shares. But we can use a put selling strategy to potentially buy at an even bigger discount while generating income for our accounts.

Generate Income Now For The Chance To Buy CBS At Discount

I initiate almost all of my long positions by selling put options one or two months out. Why pay full price for a stock when you can get it at a discount or lock in a quick profit in the form of income?

By selling a put option on a stock, we are promising to buy 100 shares per contract at the option’s strike price on the expiration date if shares are trading below that strike price. If they are trading above the strike price when the option expires, we don’t have to do anything. Either way, we collect a premium in exchange for taking on the potential obligation.

With CBS trading for $53.08 at the time of this writing, we can sell the CBS Dec 55 Puts for about $4.10 per share ($410 per contract). If CBS closes below the $55 strike price at expiration on Dec. 20, we will be assigned shares at that price. Since we received $4.10 in options premium, our actual cost is $50.90 per share, a 4% discount to the current price.

There is always the possibility that we will have to buy the shares, so we want to make sure we have enough money in our account to cover the purchase. For each contract we sell, we will need to set aside $5,090 of our own capital plus the $410 received from the put sale.

If CBS continues to rally and closes above $55 on expiration, we keep the premium for a gain of 8.1% over the $5,090 in just 75 days. If you were able to make a similar trade every 75 days, you could generate a 39% annual rate of return.

I like CBS all the way up to $60, which gives it a price multiple of just 15 times expected 2015 earnings. Since I like the long-term outlook for the shares, unless the price surges, I would probably sell another put option for a later expiration when this one expires.

Note: Selling puts is one of the best strategies for generating consistent, market-beating returns. My colleague, Amber Hestla, for example, has generated 54.5% average annualized gains with this strategy on her way to a perfect 66 for 66 track record.

You can learn exactly how to make the same trades — plus details about her first 52 successful trades — by following this link.

This article originally appeared on ProfitableTrading.com: Old-Guard Media Stock Could Surprise Traders With a 39% a Year Return