CIA SANEAMENTO BASICO DE-ADR (NYSE:SBS) – A Strong Contender for CANSLIM Investors

CIA SANEAMENTO BASICO DE-ADR (NYSE:SBS) was identified by our CANSLIM stock screener as a potential candidate for growth-focused investors. The company, which provides water and sewage services in Brazil, meets several key criteria of the CANSLIM strategy, including strong earnings growth, high relative strength, and solid profitability. Below, we examine why SBS stands out.

Key CANSLIM Criteria Met by SBS

• Earnings Growth (C & A Criteria)

  • Quarterly EPS growth (Q2Q) of 80.83%, well above the CANSLIM minimum threshold of 20%.
  • Revenue growth (Q2Q) of 28.61%, exceeding the 25% benchmark.
  • Three-year EPS growth of 60.79%, demonstrating sustained profitability.

• Relative Strength (L Criteria)

  • A ChartMill Relative Strength score of 84.22, placing it in the top 16% of stocks.
  • Outperforms 92% of its peers in the Water Utilities industry.

• Institutional Sponsorship (I Criteria)

  • Institutional ownership stands at 40.17%, indicating interest from larger investors while leaving room for further institutional accumulation.

• Financial Health (S Criteria)

  • Debt-to-equity ratio of 0.65, below the CANSLIM-recommended maximum of 2.
  • Return on Equity (ROE) of 26.66%, reflecting efficient use of shareholder capital.

Technical and Fundamental Highlights

• Technical Analysis: SBS is in a strong uptrend, with both short-term and long-term trends positive. The stock is trading near the upper end of its 52-week range, supported by multiple key moving averages.
• Fundamental Analysis: The company scores well on profitability, with high margins and solid returns on capital. Valuation remains reasonable, with a P/E ratio of 7.68, below industry and S&P 500 averages.

For a deeper look, review the full technical analysis and fundamental report.

Our CANSLIM High Growth screener lists more high-growth stocks and is updated daily.

Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should always conduct your own analysis before making investment decisions.