Latest news with #multi-bagger
Yahoo
2 days ago
- Business
- Yahoo
Investors Met With Slowing Returns on Capital At Central Asia Metals (LON:CAML)
There are a few key trends to look for if we want to identify the next multi-bagger. Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. Having said that, from a first glance at Central Asia Metals (LON:CAML) we aren't jumping out of our chairs at how returns are trending, but let's have a deeper look. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. To calculate this metric for Central Asia Metals, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.17 = US$69m ÷ (US$440m - US$28m) (Based on the trailing twelve months to December 2024). Therefore, Central Asia Metals has an ROCE of 17%. In absolute terms, that's a satisfactory return, but compared to the Metals and Mining industry average of 11% it's much better. View our latest analysis for Central Asia Metals In the above chart we have measured Central Asia Metals' prior ROCE against its prior performance, but the future is arguably more important. If you'd like, you can check out the forecasts from the analysts covering Central Asia Metals for free. There hasn't been much to report for Central Asia Metals' returns and its level of capital employed because both metrics have been steady for the past five years. This tells us the company isn't reinvesting in itself, so it's plausible that it's past the growth phase. With that in mind, unless investment picks up again in the future, we wouldn't expect Central Asia Metals to be a multi-bagger going forward. That probably explains why Central Asia Metals has been paying out 87% of its earnings as dividends to shareholders. If the company is in fact lacking growth opportunities, that's one of the viable alternatives for the money. In summary, Central Asia Metals isn't compounding its earnings but is generating stable returns on the same amount of capital employed. And with the stock having returned a mere 39% in the last five years to shareholders, you could argue that they're aware of these lackluster trends. So if you're looking for a multi-bagger, the underlying trends indicate you may have better chances elsewhere. If you want to know some of the risks facing Central Asia Metals we've found 2 warning signs (1 is significant!) that you should be aware of before investing here. While Central Asia Metals isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets. 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
6 days ago
- Business
- Yahoo
Returns On Capital Are Showing Encouraging Signs At Stride (NYSE:LRN)
To find a multi-bagger stock, what are the underlying trends we should look for in a business? Ideally, a business will show two trends; firstly a growing return on capital employed (ROCE) and secondly, an increasing amount of capital employed. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. With that in mind, we've noticed some promising trends at Stride (NYSE:LRN) so let's look a bit deeper. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. To calculate this metric for Stride, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.19 = US$377m ÷ (US$2.2b - US$270m) (Based on the trailing twelve months to March 2025). Thus, Stride has an ROCE of 19%. On its own, that's a standard return, however it's much better than the 9.8% generated by the Consumer Services industry. See our latest analysis for Stride In the above chart we have measured Stride's prior ROCE against its prior performance, but the future is arguably more important. If you'd like, you can check out the forecasts from the analysts covering Stride for free. Investors would be pleased with what's happening at Stride. Over the last five years, returns on capital employed have risen substantially to 19%. Basically the business is earning more per dollar of capital invested and in addition to that, 149% more capital is being employed now too. So we're very much inspired by what we're seeing at Stride thanks to its ability to profitably reinvest capital. One more thing to note, Stride has decreased current liabilities to 12% of total assets over this period, which effectively reduces the amount of funding from suppliers or short-term creditors. Therefore we can rest assured that the growth in ROCE is a result of the business' fundamental improvements, rather than a cooking class featuring this company's books. A company that is growing its returns on capital and can consistently reinvest in itself is a highly sought after trait, and that's what Stride has. And with the stock having performed exceptionally well over the last five years, these patterns are being accounted for by investors. So given the stock has proven it has promising trends, it's worth researching the company further to see if these trends are likely to persist. On the other side of ROCE, we have to consider valuation. That's why we have a that is definitely worth checking out. For those who like to invest in solid companies, check out this free list of companies with solid balance sheets and high returns on equity. 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
Yahoo
30-06-2025
- Business
- Yahoo
Banyan Tree Holdings (SGX:B58) Hasn't Managed To Accelerate Its Returns
To find a multi-bagger stock, what are the underlying trends we should look for in a business? Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. However, after investigating Banyan Tree Holdings (SGX:B58), we don't think it's current trends fit the mold of a multi-bagger. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. Analysts use this formula to calculate it for Banyan Tree Holdings: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.027 = S$37m ÷ (S$1.8b - S$461m) (Based on the trailing twelve months to December 2024). Therefore, Banyan Tree Holdings has an ROCE of 2.7%. Ultimately, that's a low return and it under-performs the Hospitality industry average of 3.7%. Check out our latest analysis for Banyan Tree Holdings Historical performance is a great place to start when researching a stock so above you can see the gauge for Banyan Tree Holdings' ROCE against it's prior returns. If you'd like to look at how Banyan Tree Holdings has performed in the past in other metrics, you can view this free graph of Banyan Tree Holdings' past earnings, revenue and cash flow. There hasn't been much to report for Banyan Tree Holdings' returns and its level of capital employed because both metrics have been steady for the past five years. This tells us the company isn't reinvesting in itself, so it's plausible that it's past the growth phase. So don't be surprised if Banyan Tree Holdings doesn't end up being a multi-bagger in a few years time. In summary, Banyan Tree Holdings isn't compounding its earnings but is generating stable returns on the same amount of capital employed. Since the stock has gained an impressive 75% over the last five years, investors must think there's better things to come. Ultimately, if the underlying trends persist, we wouldn't hold our breath on it being a multi-bagger going forward. If you want to continue researching Banyan Tree Holdings, you might be interested to know about the 2 warning signs that our analysis has discovered. If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive returns on equity. 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
Yahoo
25-06-2025
- Business
- Yahoo
Park-Ohio Holdings (NASDAQ:PKOH) Has Some Way To Go To Become A Multi-Bagger
There are a few key trends to look for if we want to identify the next 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. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. However, after briefly looking over the numbers, we don't think Park-Ohio Holdings (NASDAQ:PKOH) has the makings of a multi-bagger going forward, but let's have a look at why that may be. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. To calculate this metric for Park-Ohio Holdings, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.086 = US$90m ÷ (US$1.4b - US$361m) (Based on the trailing twelve months to March 2025). Therefore, Park-Ohio Holdings has an ROCE of 8.6%. Ultimately, that's a low return and it under-performs the Machinery industry average of 11%. View our latest analysis for Park-Ohio Holdings In the above chart we have measured Park-Ohio Holdings' prior ROCE against its prior performance, but the future is arguably more important. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for Park-Ohio Holdings . Things have been pretty stable at Park-Ohio Holdings, with its capital employed and returns on that capital staying somewhat the same for the last five years. Businesses with these traits tend to be mature and steady operations because they're past the growth phase. So don't be surprised if Park-Ohio Holdings doesn't end up being a multi-bagger in a few years time. In a nutshell, Park-Ohio Holdings has been trudging along with the same returns from the same amount of capital over the last five years. Unsurprisingly, the stock has only gained 23% over the last five years, which potentially indicates that investors are accounting for this going forward. Therefore, if you're looking for a multi-bagger, we'd propose looking at other options. Park-Ohio Holdings does come with some risks though, we found 3 warning signs in our investment analysis, and 1 of those is concerning... While Park-Ohio Holdings 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. — Investing narratives with Fair Values A case for TSXV:USA to reach USD $5.00 - $9.00 (CAD $7.30–$12.29) by 2029. By Agricola – Community Contributor Fair Value Estimated: CA$12.29 · 0.9% Overvalued DLocal's Future Growth Fueled by 35% Revenue and Profit Margin Boosts By WynnLevi – Community Contributor Fair Value Estimated: $195.39 · 0.9% Overvalued Historically Cheap, but the Margin of Safety Is Still Thin By Mandelman – Community Contributor Fair Value Estimated: SEK232.58 · 0.2% Overvalued View more featured narratives — 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. Sign in to access your portfolio
Yahoo
25-06-2025
- Business
- Yahoo
Returns On Capital At Sanford (NZSE:SAN) Have Hit The Brakes
If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. However, after investigating Sanford (NZSE:SAN), we don't think it's current trends fit the mold of a multi-bagger. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. Analysts use this formula to calculate it for Sanford: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.075 = NZ$72m ÷ (NZ$1.0b - NZ$87m) (Based on the trailing twelve months to March 2025). So, Sanford has an ROCE of 7.5%. Ultimately, that's a low return and it under-performs the Food industry average of 9.6%. See our latest analysis for Sanford Above you can see how the current ROCE for Sanford compares to its prior returns on capital, but there's only so much you can tell from the past. If you're interested, you can view the analysts predictions in our free analyst report for Sanford . The returns on capital haven't changed much for Sanford in recent years. The company has consistently earned 7.5% for the last five years, and the capital employed within the business has risen 26% in that time. This poor ROCE doesn't inspire confidence right now, and with the increase in capital employed, it's evident that the business isn't deploying the funds into high return investments. In conclusion, Sanford has been investing more capital into the business, but returns on that capital haven't increased. Additionally, the stock's total return to shareholders over the last five years has been flat, which isn't too surprising. On the whole, we aren't too inspired by the underlying trends and we think there may be better chances of finding a multi-bagger elsewhere. While Sanford doesn't shine too bright in this respect, it's still worth seeing if the company is trading at attractive prices. You can find that out with our on our platform. For those who like to invest in solid companies, check out this free list of companies with solid balance sheets and high returns on equity. 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.
