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Can Companhia de Saneamento Basico do Estado de Sao Paulo (NYSE:SBS) Offer Investors Safety?

Companhia de Saneamento Basico do Estado de Sao Paulo (NYSE:SBS) Relative Strength Index (RSI) is 44.82, with weekly volatility at 2.95% and ATR at 0.21. The SBS stock’s 52-week price range has touched low of $6.00 and a $12.21 high. Intraday shares traded counted 3.08 million, which was -118.16% lower than its 30-day average trading volume of 1.41M. Its shares traded lower over the last trading session, losing -0.92% on 06/18/21. The shares fell to a low of $7.48 before closing at $7.56. SBS’s previous close was $7.63 while the outstanding shares total 683.51M. The firm has a beta of 1.08, a 12-month trailing P/E ratio of 12.15, and a growth ratio of 1.13.

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Investors have identified the Utilities – Regulated Water company Companhia de Saneamento Basico do Estado de Sao Paulo as an interesting stock but before investments are made there, an in-depth look at its trading activities will have to be conducted. The share is trading with a market value of around $5.25 billion, the company now has both obstacles and catalysts that affect them and they came from their mode of operations. With the company affected by events currently, it is a perfect time to analyze the numbers behind the firm in order to come up with a rather realistic picture of what this stock is.

Companhia de Saneamento Basico do Estado de Sao Paulo (SBS) Fundamentals that are to be considered.

When analyzing a stock, the first fundamental thing to take into account is the balance sheet. How healthy the balance sheet of a company is will determine if the company will be able to carry out all its financial and non-financial obligations and also keep the faith of its investors. For SBS, the company has in raw cash 164.81 million on their books with 590.3 million currently as liabilities. How the trend is over time is what investors should be concerned about. The company has a healthy balance sheet as their debt profile has been on an incline. In terms of their assets, the company currently has 1.15 billion total, with 1.14 billion as their total liabilities.

SBS were able to record 189.62 million as free cash flow during the 08/12/2021 quarter of the year, this saw their quarterly net cash flow reduce by 85.66 million. In cash movements, the company had a total of 191.15 million as operating cash flow.

Potential earnings growth for Companhia de Saneamento Basico do Estado de Sao Paulo (SBS)

In order to determine the future investment potential for this stock, we will have to analyze key trends that affect it. During the 08/12/2021 quarter of the year, Companhia de Saneamento Basico do Estado de Sao Paulo recorded a total of 855.97 million in revenue. This figure implies that they witnessed a quarterly year/year change in their earnings with -6.68% coming in sequential stages and their sales for the 08/12/2021 quarter reducing by -3.61%.

What matters though is how it ends. When the core data for the company is broken down, then the stock sounds interesting. The company spent 653.75 million trying to sell their products during the last quarter, with the result yielding a gross income of 202.21 million. This allows shareholders to hold on to 683.51M with the recently reported earning now reading 0.13 cents per share. This is a figure that compared to analyst’s prediction for their 08/12/2021 (0.45 cents a share).

Is the stock of SBS attractive?

In the last 6 months, insiders have changed their ownership in shares of company stock by 41.50%.

7 out of 9 analysts covering the stock have rated it a Buy, while 2 have maintained a Hold recommendation on Companhia de Saneamento Basico do Estado de Sao Paulo. 0 analysts has assigned a Sell rating on the SBS stock. The 12-month mean consensus price target for the company’s shares has been set at $11.53.

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