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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (38455)	5/31/2011 3:06:00 PM
From: E_K_S	Read Replies (1) of 78748

Hi Paul - Re: Companhia de Saneamento Basico do Estado de Sao Paulo (SBS) Do you still own your SBS? I ran across this article and they continue to recommend the company. I was surprised that the PE is quite low (around 7). The stock is over 300% since July 2009. They have quite a bit of debt ($5B) making their Enterprise value at $10.76B. Net income was almost $1B last year so their annual income supports their large debt load. Water: Opportunities Exist With Forgotten Commodity seekingalpha.com From the article:"...Sabesp (SBS) is the Brazilian leader in water purification, and has been able to clean and monopolize water and sewer services in the Sao Paulo region. The stock's 21% net profit margin is high for a utility, it is in a technical uptrend, and it is still trading cheaply with a 7.33 P/E ratio. Expansion opportunities are available if it builds a plant in the Amazon delta in northern Brazil....". -------------------------------------------------------------------- The company also paid a $0.93/share dividend in 2009 but nothing for 2010 or 2011. Not sure what their dividend policy is as there was no dividend in 2007 or 2008 either. Stock is selling close to an all time high. Hate to buy at this level but the company still looks like a compelling "Value Buy". What's your take? EKS

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