Opinions
The Panic-Proof Portfolio (Stockchase Research)
SABESP
SBS-N
TOP PICK
May 15, 2025
Stock price when the opinion was issued
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(A Top Pick June 12/12. Down 19.53%.) Water utility company in São Paulo. Stock has been absolutely hammered by the political turmoil that is going on in Brazil and the weakness in the Brazilian dollar. Brazil is a place you want to avoid for a little bit. This is a good stock to own. 5X earnings. Nice dividend yield.
Premium contentSBS is a Sao Paulo based provider of basic environmental and sanitation services to over 350 municipalities in Brazil. It trades at 12x earnings, 1.6x book and supports a ROE of 27%. Recently reported earnings showed a 17% in earnings. We recommend setting a stop-loss at $11.25, looking to achieve $21.00 -- upside potential of 35%. Yield 1.8%
(Analysts’ price target is $21.38)Premium contentWe reiterate SBS, Brazil's largest provider of environmental and sanitation services as a TOP PICK. We like that cash reserves continue to grow, it trades at 6x earnings, under 2x book and supports a 27% ROE. We recommend trailing up the stop (from $11.25) to $14.00, looking to achieve $20.00 -- upside potential of 23%. Yield 1.6%
(Analysts’ price target is $20.20)Premium contentWe reiterate SBS, Brazil’s water treatment and sewage management utility as a TOP PICK. Aside from offering global diversification, it operates in a conservative space. It trades at 15x earnings, 1.6x book and supports a ROE of 27%. We continue to recommend a stop at $14, looking to achieve $21 — upside potential over 25%. Yield 3.1%
(Analysts’ price target is $20.79)Premium contentWe reiterate this Brazil based water treatment utility as a TOP PICK. It has avoided much of the tariff related mayhem thus far and provides some geographic diversification. It trades at 15x earnings, 1.7x book and supports a 28% ROE. We recommend scaling up the stop (from $14) to $16, looking to achieve $23 -- upside potential over 30%.
(Analysts’ price target is $23.85)Premium content
We reiterate SBS, Brazil's sanitation utility, as a TOP PICK. The company plans to double its infrastructure base by 2029 and analysts foresee 45% growth in EPS next year. It trades at 16x earnings, 2x book and supports a robust 29% ROE. We continue to recommend a stop at $17.50, looking to achieve $24.00 -- upside potential of 17%. Yield 2.1%
(Analysts’ price target is $23.75)