Zacks Investment Research upgraded
Companhia de Saneamento Basico do Estado de Sao Paulo, or
) to a Zacks Rank #1 (Strong Buy) on Mar 27, 2013. The company is
a Brazil-based water and sewage service provider and currently
has a market capitalization of $10.7 billion.
Why the Upgrade?
AMER WATER WORK (AWK): Free Stock Analysis
AMER STATES WTR (AWR): Free Stock Analysis
SABESP -ADR (SBS): Free Stock Analysis Report
AQUA AMER INC (WTR): Free Stock Analysis
To read this article on Zacks.com click here.
Financial results for the year 2012 posted by SABESP on Mar 21,
2013 were impressive. The company's earnings per share, as
reported by SABESP, were R$8.39, up 56.2% year over year. In ADR
terms, earnings came in at US$8.61.
Net revenue in the year inched up 8.2% to R$10.8 billion (US$5.5
billion) on the back of higher water supply, sewage collection
and treatment, and construction revenue. Billed water and sewage
volume rose 2.7% year over year. Water volume produced increased
2.2%; water connections crept up 2.6% and sewage connections rose
SABESP reported declines in cost and expenses in 2012. As a
percentage of revenue, cost of sales and services plummeted 60
basis points to 60.1%. Gross margin came in at 39.9%. Operating
expenses, including selling, administrative and other expenses
declined 7.2% year over year and represented 13.4% of the total
Solid financial results in 2012 and positive earnings surprise in
two out of four trailing quarters, with an average of +11.5%,
have raised our optimism for better results in the years ahead
for SABESP. In the last 7 days, the Zacks Consensus Estimate for
2013 went up by 8.9% to US$4.54 per ADR while that for 2014
increased 19.9% to US$5.18 per ADR. Also, we have an Earnings ESP
Zacks Earnings ESP: A Better Method
) of +7.7% for 2013.
Other Stocks to Consider
Other stocks to watch out for in the industry are
Aqua America Inc.
), with a Zacks Rank #1 (Strong Buy) while
American States Water Company
American Water Works Company, Inc.
), both carry Zacks Rank #2 (Buy).