Central European Media Enterprises Popped: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of multi-media entertainer Central European Media Enterprises (NAS: CETV) are drawing rave reviews today by jumping as high as 11.4% on very heavy trading volume.

So what: The company just reported 24% year-over-year sales growth in the second quarter and a rare instance of positive earnings, beating estimates on both counts. This popping action has become a theme for Central European Media investors as the earnings reports in February and April produced similar reactions.

Now what: CEM's earnings may be habitually weak, but the company generates plenty of free cash and strong sales growth. That's a good thing, because the company is also saddled with heavy debt -- just like American counterparts CBS (NYS: CBS) and Walt Disney (NYS: DIS) , or indeed any broadcaster worth mentioning. As Central and Eastern Europe climb out of the quasi-third-world category to join the rest of us sprawling suburbanites, CEM looks poised to capitalize on that population's newfound wealth and the advertising spree that's sure to follow. For more insight into investing in Central and Eastern Europe, you should grab a free trial subscription to our Global Gains service -- no strings attached.

Interested in more info on Central European Media Enterprises? Add it to your watchlist.

At the time this article was published Fool contributor Anders Bylund holds no position in any of the companies discussed here. Motley Fool newsletter services have recommended buying shares of Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool is investors writing for investors.

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