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3 Reasons Why SABESP (SBS) Is a Great Growth Stock
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Finding a great growth stock can be a tough task. Not only are there a wide range of choices, but the space can be extremely volatile and fraught with risk as well. But thanks to our new style score system we have been able to identify a few growth stocks which have incredible potential in the near term.
One such company that stands out in this regard is undoubtedly Companhia de Saneamento Basico do Estado de Sao Paulo (SBS - Free Report) . Not only does this company have a favorable growth score, but it is ranked as a buy too. And while there are numerous reasons why SBS is so attractive right now, we have highlighted three of the most important—and pertinent to growth investors—below:
Earnings Growth for SBS
Arguably nothing is more important than earnings growth as surging profit levels is what most investors are after. And for growth investors, earnings growth in the double digits is definitely necessary and it is often an indication of strong prospects (and stock price gains) ahead for the company in question.
While SBS has put up a historical EPS growth rate of 343.8% investors should really focus on the projected growth. Here, SBS is looking to grow at a rate of 195.8%, thoroughly crushing the industry average which calls for EPS growth of just 5.38%in comparison.
Sales/Assets Ratio is Impressive for SABESP Stock
The sales/asset ratio is often overlooked by investors, but it can be an important indicator in growth investing nonetheless. This metric—also known as S/TA for short—shows us how much sales are generated from the company’s assets which can indicate that a firm is using its assets effectively.
Right now SABESP has a S/TA ratio of 0.40, which means that the company gets 40 cents in sales for each dollar in assets. Compare this to the industry average which is a ratio of 0.20 and you can say that SBS is a bit more efficient than the industry at large.
SBS Earnings Estimate Revisions Moving in the Right Direction
If the metrics outlined above weren’t enough investors should also consider the positive trends that we are seeing on the analyst estimate revision front. Analysts have been raising their estimates for SABESP lately, and now the earnings picture is looking a bit more favorable for the company.
Over the past 60 days, 1 EPS estimate has been revised higher compared to none lower, at least for the current year time frame. And the magnitude of these revisions has also been impressive, as the consensus estimate for the full year has surged from 66 cents per share to 71 cents per share today.
Bottom Line
For the reasons outlined above, investors shouldn’t be surprised to note that SABESP has earned itself a growth score of ‘A’ as well as a Zacks Rank #1 (Strong Buy). This means that we believe SABESP stock is a potential outperformer that is an impressive choice for growth investors, making it a security that you need to keep on your radar in the near term.
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3 Reasons Why SABESP (SBS) Is a Great Growth Stock
Finding a great growth stock can be a tough task. Not only are there a wide range of choices, but the space can be extremely volatile and fraught with risk as well. But thanks to our new style score system we have been able to identify a few growth stocks which have incredible potential in the near term.
One such company that stands out in this regard is undoubtedly Companhia de Saneamento Basico do Estado de Sao Paulo (SBS - Free Report) . Not only does this company have a favorable growth score, but it is ranked as a buy too. And while there are numerous reasons why SBS is so attractive right now, we have highlighted three of the most important—and pertinent to growth investors—below:
Earnings Growth for SBS
Arguably nothing is more important than earnings growth as surging profit levels is what most investors are after. And for growth investors, earnings growth in the double digits is definitely necessary and it is often an indication of strong prospects (and stock price gains) ahead for the company in question.
While SBS has put up a historical EPS growth rate of 343.8% investors should really focus on the projected growth. Here, SBS is looking to grow at a rate of 195.8%, thoroughly crushing the industry average which calls for EPS growth of just 5.38%in comparison.
Sales/Assets Ratio is Impressive for SABESP Stock
The sales/asset ratio is often overlooked by investors, but it can be an important indicator in growth investing nonetheless. This metric—also known as S/TA for short—shows us how much sales are generated from the company’s assets which can indicate that a firm is using its assets effectively.
Right now SABESP has a S/TA ratio of 0.40, which means that the company gets 40 cents in sales for each dollar in assets. Compare this to the industry average which is a ratio of 0.20 and you can say that SBS is a bit more efficient than the industry at large.
SBS Earnings Estimate Revisions Moving in the Right Direction
If the metrics outlined above weren’t enough investors should also consider the positive trends that we are seeing on the analyst estimate revision front. Analysts have been raising their estimates for SABESP lately, and now the earnings picture is looking a bit more favorable for the company.
SABESP -ADR Price and Consensus
SABESP -ADR Price and Consensus | SABESP -ADR Quote
Over the past 60 days, 1 EPS estimate has been revised higher compared to none lower, at least for the current year time frame. And the magnitude of these revisions has also been impressive, as the consensus estimate for the full year has surged from 66 cents per share to 71 cents per share today.
Bottom Line
For the reasons outlined above, investors shouldn’t be surprised to note that SABESP has earned itself a growth score of ‘A’ as well as a Zacks Rank #1 (Strong Buy). This means that we believe SABESP stock is a potential outperformer that is an impressive choice for growth investors, making it a security that you need to keep on your radar in the near term.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>