CIA SANEAMENTO BASICO DE-ADR (NYSE:SBS) Excels with Strong CAN SLIM Investment Profile

The CAN SLIM investment methodology, created by William O'Neil, joins fundamental and technical analysis to find high-growth stocks with solid momentum potential. This methodical process assesses companies using seven main factors represented by the acronym CAN SLIM, concentrating on earnings speed, yearly growth patterns, new products or services, supply-demand forces, industry leadership, institutional backing, and the general market trend. People using this method look for companies displaying strong financial results while also presenting technical firmness in their price movements.

Earnings and Sales Momentum

Companhia de Saneamento Basico do Estado de Sao Paulo SABESP (NYSE:SBS) shows outstanding quarterly growth that fits well with the "C" factor in CAN SLIM, which stresses current quarterly earnings and sales speed. The company's latest financial reports display notable momentum:

• Quarterly EPS growth of 76.3% versus the same quarter last year
• Quarterly revenue growth of 32.8% year-over-year
• Both numbers are much higher than the CAN SLIM minimum levels of 20-25%

This speeding growth trend is important for CAN SLIM users since it shows the company is building operational speed and market acceptance, frequently coming before major price gains.

Annual Earnings Growth and Profitability

The "A" in CAN SLIM looks at yearly earnings gains, and SBS performs well in this area with a three-year EPS growth rate of 60.8%. This is much better than the method's 25% minimum need and shows continued profitability gains. The company's return on equity of 27.6% is in the group of top players in its field, greatly exceeding the 10% level suggested by O'Neil. High ROE shows good use of shareholder money and often connects with lasting competitive benefits.

Financial Health and Institutional Support

SBS keeps a careful financial setup with a debt-to-equity ratio of 0.69, much lower than the CAN SLIM highest level of 2.0. This sensible debt situation offers financial room and lowers risk in economic declines. Institutional ownership is at 51.6%, showing professional investor attention while allowing space for more institutional buying. The reasonable institutional ownership amount is positive under CAN SLIM ideas because it implies the stock has not yet hit full institutional holding, permitting future purchasing force from this investor group.

Technical Strength and Market Leadership

From a technical view, SBS shows notable firmness with a relative strength rating of 92.2, meaning it does better than 92% of all stocks in the market. This matches the "L" factor in CAN SLIM, which stresses putting money in industry front-runners instead of poorer performers. The stock is now trading close to 52-week highs, confirming institutional gathering and positive market feeling. Both near-term and long-term patterns stay positive, with the stock showing steady upward movement over several time periods.

Complete Analysis Summary

The fundamental analysis report gives SBS a score of 6 out of 10, pointing out excellent profitability numbers but mentioning some questions about financial health. The technical analysis report awards SBS a full 10 out of 10 score, showing firm price action across all studied time periods. People can examine the full fundamental analysis and technical analysis reports for more detailed views on the company's financial situation and chart formations.

Investment Points

While SBS fits several CAN SLIM factors through its firm earnings growth, high profitability, careful financial setup, and excellent relative strength, people should think about the wider market situation. The S&P 500 presently displays a neutral long-term pattern with positive near-term momentum, which usually helps growth investing methods. However, the company's future earnings forecasts show some slowing, which needs watching for CAN SLIM users who focus on speeding growth trends.

For people looking for more options that fit CAN SLIM factors, the predefined screener setup gives continuous screening outcomes based on this method.

This article provides information for learning purposes only and should not be taken as investment guidance, a suggestion to purchase or sell any security, or as a replacement for professional financial advice. All investment choices carry risk, including the potential loss of the original amount invested. Readers should perform their own investigation and talk with a qualified financial advisor before making any investment decisions. Past results do not ensure future outcomes.