Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Brazilian water utility Sabesp
With that in mind, let's take a closer look at Sabesp's business and see what CAPS investors are saying about the stock right now.
|Headquarters (founded)||Sao Paulo (1954)|
|Market Cap||$6.6 billion|
|Trailing-12-Month Revenue||$5.9 billion|
CEO Dilma Pena (since January 2011)
CFO Rui Affonso (since July 2003)
|Return on Equity (average, past 3 years)||9.8%|
|Cash/Debt||$1.36 billion / $5.06 billion|
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
Earlier this year, ts2006 succinctly summed up the Sabesp bull case: "water services in Brazil -- looks to grow and maintain profitability."
Currently, Sabesp even sports a cheapish forward P/E of eight. That represents a slight discount to competitor Veolia (9) and a much larger one compared to industry peers American Water Works
CAPS member TMFBiggles elaborates on the bargain opportunity:
P/E is less than HALF that of AWK. ... [L]arger service area, much greater potential for future deployment (really, how many people in the US are without running water, vs. people in Brazil?). ...
The only real worries are from political cronyism ruining its expansion plans or profitability, as the state of Sao Paulo owns half the company, but it's a monopoly provider to one of the wealthiest areas of Brazil, and it's not limited to that state, so could expand to the rest of Brazil in the future.
I think SBS could be very valuable down the line as not only a water/wastewater provider but a water exporter to other regions from the Sao Paulo operations, but that's just a theory.
What do you think about Sabesp, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!
Interested in another easy way to track Sabesp? Add it to your watchlist.
Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Aqua America. The Motley Fool owns shares of Veolia. Try any of our Foolish newsletter services free for 30 days.
More from The Motley Fool
Why This Water Stock Jumped 9.3% in November
Shares of the Brazilian water utility Sabesp got a nice boost last month, thanks to better-than-expected third-quarter earnings.
Sabesp Stock Upgraded: A Cheap Utility in Brazil?
One analyst spots a bargain in shares of Brazil's Companhia de Saneamento Basico do Estado de Sao Paulo.
Sabesp's First-Quarter Earnings Show How a Water Utility Can Perform Without a Drought
Most of the issues that plagued Sabesp's results over the past few years are behind it, and now it's just another boring water utility business.