Latest news with #UGHealthcare
Yahoo
5 days ago
- Business
- Yahoo
UG Healthcare (Catalist:8K7) Is Reinvesting At Lower Rates Of Return
Did you know there are some financial metrics that can provide clues of a potential multi-bagger? In a perfect world, we'd like to see a company investing more capital into its business and ideally the returns earned from that capital are also increasing. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. In light of that, when we looked at UG Healthcare (Catalist:8K7) and its ROCE trend, we weren't exactly thrilled. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. Understanding Return On Capital Employed (ROCE) If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. Analysts use this formula to calculate it for UG Healthcare: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.0019 = S$354k ÷ (S$232m - S$45m) (Based on the trailing twelve months to December 2024). Therefore, UG Healthcare has an ROCE of 0.2%. Ultimately, that's a low return and it under-performs the Medical Equipment industry average of 7.8%. See our latest analysis for UG Healthcare While the past is not representative of the future, it can be helpful to know how a company has performed historically, which is why we have this chart above. If you'd like to look at how UG Healthcare has performed in the past in other metrics, you can view this free graph of UG Healthcare's past earnings, revenue and cash flow. How Are Returns Trending? When we looked at the ROCE trend at UG Healthcare, we didn't gain much confidence. Around five years ago the returns on capital were 6.3%, but since then they've fallen to 0.2%. However, given capital employed and revenue have both increased it appears that the business is currently pursuing growth, at the consequence of short term returns. If these investments prove successful, this can bode very well for long term stock performance. On a side note, UG Healthcare has done well to pay down its current liabilities to 19% of total assets. That could partly explain why the ROCE has dropped. What's more, this can reduce some aspects of risk to the business because now the company's suppliers or short-term creditors are funding less of its operations. Some would claim this reduces the business' efficiency at generating ROCE since it is now funding more of the operations with its own money. Our Take On UG Healthcare's ROCE In summary, despite lower returns in the short term, we're encouraged to see that UG Healthcare is reinvesting for growth and has higher sales as a result. Despite these promising trends, the stock has collapsed 87% over the last five years, so there could be other factors hurting the company's prospects. Therefore, we'd suggest researching the stock further to uncover more about the business. Since virtually every company faces some risks, it's worth knowing what they are, and we've spotted 2 warning signs for UG Healthcare (of which 1 is a bit unpleasant!) that you should know about. While UG Healthcare may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
16-06-2025
- Business
- Yahoo
Investors in UG Healthcare (Catalist:8K7) have unfortunately lost 56% over the last five years
We think intelligent long term investing is the way to go. But no-one is immune from buying too high. Zooming in on an example, the UG Healthcare Corporation Limited (Catalist:8K7) share price dropped 58% in the last half decade. That's not a lot of fun for true believers. Now let's have a look at the company's fundamentals, and see if the long term shareholder return has matched the performance of the underlying business. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. Because UG Healthcare made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually desire strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit. In the last five years UG Healthcare saw its revenue shrink by 12% per year. That puts it in an unattractive cohort, to put it mildly. Arguably, the market has responded appropriately to this business performance by sending the share price down 10% (annualized) in the same time period. We don't generally like to own companies that lose money and don't grow revenues. You might be better off spending your money on a leisure activity. You'd want to research this company pretty thoroughly before buying, it looks a bit too risky for us. The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers). This free interactive report on UG Healthcare's balance sheet strength is a great place to start, if you want to investigate the stock further. Investors should note that there's a difference between UG Healthcare's total shareholder return (TSR) and its share price change, which we've covered above. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Its history of dividend payouts mean that UG Healthcare's TSR, which was a 56% drop over the last 5 years, was not as bad as the share price return. Investors in UG Healthcare had a tough year, with a total loss of 19%, against a market gain of about 23%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 9% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. To that end, you should learn about the 2 warning signs we've spotted with UG Healthcare (including 1 which makes us a bit uncomfortable) . Of course UG Healthcare may not be the best stock to buy. So you may wish to see this free collection of growth stocks. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Singaporean exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
