$SBS is a Brazilian water and sewer utility monopoly operating in the São Paulo state.

At the current stock price levels, the company is trading at c. 8x TTM EBITDA and 10x P/E.

While these are not exceptionally low multiples, the company's earnings are expected to grow significantly due to anticipated operational efficiency improvements initiated by the controlling private shareholder. Additionally, there are industry tailwinds, as Brazil aims to universalize water and sewer services. SBS's earnings could potentially quadruple over the next five years.

What has kept me on the sidelines is the difficulty in gaining confidence in the company's prospects and navigating industry regulations and dynamics, which may be influenced by political factors.
#SBS