American States Water (AWR - Free Report) is a Zacks Rank #5 (Strong Sell) as estimates have fallen for this stock. Aftrer an earnings miss in early November, this stock has actually moved higher and that means the valuation has also moved higher. Let's take a deeper look at this tock in thie Bear of the Day article.
Description
American States Water Company along with its subsidiaries provides fresh water, wastewater services and electricity to its customers in the United States. The company principally works through its two major subsidiaries — Golden State Water Company (“GSWC”) and American States Utility Services (“ASUS”). American States Water Company and its subsidiaries had a total of 841 employees as of Dec 31, 2019. The company was founded in 1929.
Earnings History
The earnings history for AWR is not that great. I see two misses, one beat and one meet.
The good news in there is that the beat was a solid one and big enough to keep the average positive over the last four quarters.
Estimate Revisions
The Zacks Rank tells us when earnings estimates are moving lower. I see the current quarter moving higher, but the full year 2020 number is actually moving lower.
Next quarter, which will really be the 1st quarter of 2021 as the final quarter of 2020 hasn't been reported yet, has ticked lower.
The full year 2021 number has dipped 3 cents from $2.42 to $2.39.
When estimates move lower, the Zacks Rank will also move lower.
Valuation
For a utility with little in the way of topline growth you would think the earnings multiple would be pretty reasonable. That is not the case, with a 33x forward earnings mulitple and a 4.7x price to book multiple. The price to sales is also super high at 6.2x.
This high valuation is due in part to the stock moving higher over the last few months. If there is a correction, Utilities are often thought of as a safe harbor, but that might not be the case for this stock.
Chart
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American States Water (AWR - Free Report) is a Zacks Rank #5 (Strong Sell) as estimates have fallen for this stock. Aftrer an earnings miss in early November, this stock has actually moved higher and that means the valuation has also moved higher. Let's take a deeper look at this tock in thie Bear of the Day article.
Description
American States Water Company along with its subsidiaries provides fresh water, wastewater services and electricity to its customers in the United States. The company principally works through its two major subsidiaries — Golden State Water Company (“GSWC”) and American States Utility Services (“ASUS”). American States Water Company and its subsidiaries had a total of 841 employees as of Dec 31, 2019. The company was founded in 1929.
Earnings History
The earnings history for AWR is not that great. I see two misses, one beat and one meet.
The good news in there is that the beat was a solid one and big enough to keep the average positive over the last four quarters.
Estimate Revisions
The Zacks Rank tells us when earnings estimates are moving lower. I see the current quarter moving higher, but the full year 2020 number is actually moving lower.
Next quarter, which will really be the 1st quarter of 2021 as the final quarter of 2020 hasn't been reported yet, has ticked lower.
The full year 2021 number has dipped 3 cents from $2.42 to $2.39.
When estimates move lower, the Zacks Rank will also move lower.
Valuation
For a utility with little in the way of topline growth you would think the earnings multiple would be pretty reasonable. That is not the case, with a 33x forward earnings mulitple and a 4.7x price to book multiple. The price to sales is also super high at 6.2x.
This high valuation is due in part to the stock moving higher over the last few months. If there is a correction, Utilities are often thought of as a safe harbor, but that might not be the case for this stock.
Chart
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
Download Marijuana Moneymakers FREE >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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