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Yahoo
3 hours ago
- Business
- Yahoo
Returns Are Gaining Momentum At Zegona Communications (LON:ZEG)
Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key financial metrics. Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an expanding 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. So on that note, Zegona Communications (LON:ZEG) looks quite promising in regards to its trends of return on capital. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. What Is 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 Zegona Communications: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.05 = €314m ÷ (€8.5b - €2.2b) (Based on the trailing twelve months to March 2025). Thus, Zegona Communications has an ROCE of 5.0%. Ultimately, that's a low return and it under-performs the Telecom industry average of 11%. Check out our latest analysis for Zegona Communications In the above chart we have measured Zegona Communications' 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 Zegona Communications . What Can We Tell From Zegona Communications' ROCE Trend? We're delighted to see that Zegona Communications is reaping rewards from its investments and is now generating some pre-tax profits. About five years ago the company was generating losses but things have turned around because it's now earning 5.0% on its capital. In addition to that, Zegona Communications is employing 1,807% more capital than previously which is expected of a company that's trying to break into profitability. We like this trend, because it tells us the company has profitable reinvestment opportunities available to it, and if it continues going forward that can lead to a multi-bagger performance. On a side note, we noticed that the improvement in ROCE appears to be partly fueled by an increase in current liabilities. Effectively this means that suppliers or short-term creditors are now funding 26% of the business, which is more than it was five years ago. It's worth keeping an eye on this because as the percentage of current liabilities to total assets increases, some aspects of risk also increase. What We Can Learn From Zegona Communications' ROCE To the delight of most shareholders, Zegona Communications has now broken into profitability. And a remarkable 560% total return over the last five years tells us that investors are expecting more good things to come in the future. With that being said, we still think the promising fundamentals mean the company deserves some further due diligence. Before jumping to any conclusions though, we need to know what value we're getting for the current share price. That's where you can check out our that compares the share price and estimated value. While Zegona Communications 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. 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
06-07-2025
- Business
- Yahoo
Do SpaceandPeople's (LON:SAL) Earnings Warrant Your Attention?
The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away. In contrast to all that, many investors prefer to focus on companies like SpaceandPeople (LON:SAL), which has not only revenues, but also profits. While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it. 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. If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. That makes EPS growth an attractive quality for any company. Impressively, SpaceandPeople has grown EPS by 17% per year, compound, in the last three years. As a general rule, we'd say that if a company can keep up that sort of growth, shareholders will be beaming. One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. EBIT margins for SpaceandPeople remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 15% to UK£6.7m. That's encouraging news for the company! You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers. View our latest analysis for SpaceandPeople SpaceandPeople isn't a huge company, given its market capitalisation of UK£2.3m. That makes it extra important to check on its balance sheet strength. Seeing insiders owning a large portion of the shares on issue is often a good sign. Their incentives will be aligned with the investors and there's less of a probability in a sudden sell-off that would impact the share price. So we're pleased to report that SpaceandPeople insiders own a meaningful share of the business. To be exact, company insiders hold 51% of the company, so their decisions have a significant impact on their investments. This makes it apparent they will be incentivised to plan for the long term - a positive for shareholders with a sit and hold strategy. Of course, SpaceandPeople is a very small company, with a market cap of only UK£2.3m. That means insiders only have UK£1.2m worth of shares, despite the large proportional holding. That might not be a huge sum but it should be enough to keep insiders motivated! If you believe that share price follows earnings per share you should definitely be delving further into SpaceandPeople's strong EPS growth. This EPS growth rate is something the company should be proud of, and so it's no surprise that insiders are holding on to a considerable chunk of shares. Fast growth and confident insiders should be enough to warrant further research, so it would seem that it's a good stock to follow. Don't forget that there may still be risks. For instance, we've identified 2 warning signs for SpaceandPeople (1 is significant) you should be aware of. There's always the possibility of doing well buying stocks that are not growing earnings and do not have insiders buying shares. But for those who consider these important metrics, we encourage you to check out companies that do have those features. You can access a tailored list of British companies which have demonstrated growth backed by significant insider holdings. Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction. — Investing narratives with Fair Values Suncorp's Next Chapter: Insurance-Only and Ready to Grow By Robbo – Community Contributor Fair Value Estimated: A$22.83 · 0.1% Overvalued Thyssenkrupp Nucera Will Achieve Double-Digit Profits by 2030 Boosted by Hydrogen Growth By Chris1 – Community Contributor Fair Value Estimated: €14.40 · 0.3% Overvalued Tesla's Nvidia Moment – The AI & Robotics Inflection Point By BlackGoat – Community Contributor Fair Value Estimated: $359.72 · 0.1% 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. 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
03-07-2025
- Business
- Yahoo
Growth funds favor Makemytrip and SK Hynix: BofA
-- Growth-oriented equity funds are increasingly concentrating bets in names showing strong earnings, price, and news momentum, according to Bank of America's latest Global Fund Performance Monitor. BofA highlighted that 'Growth funds' largest overweight positions with a high Triple Momentum Rank (top quintile by earnings, price, and news momentum) include Makemytrip (NASDAQ:MMYT), AIA, HDFC Bank, SK Hynix, and Genus (LON:GNS).' The firm's 'Triple Momentum' framework is said to identify stocks that score in the top quintile across all three metrics. On the flip side, some of Growth funds' largest overweights are in names lacking momentum, including Icon (NASDAQ:ICLR) Plc, Intermediate Capital, Clean Harbors (NYSE:CLH), and Azelis, BofA said. Value funds are also showing clear preferences, according to the bank. 'Value funds' largest overweight positions with a high Triple Momentum Rank include Capital One (NYSE:COF), US Foods, FirstCash (NASDAQ:FCFS), Popular Inc (NASDAQ:BPOP), and Markel (NYSE:MKL),' said BofA. However, negative momentum names such as Installed Building, Sysco (NYSE:SYY), ConocoPhillips (NYSE:COP), Lazard (NYSE:LAZ), and IAC still feature among top holdings. Despite a 4.4% rally in global equities during June, active fund managers struggled to beat their benchmarks. '46% of Active Funds globally outperformed benchmark with a median relative return of -0.09%,' BofA wrote. Growth and Value funds fared similarly, with 46% and 45% outperforming, respectively, while Yield funds underperformed with only 37% beating benchmarks. By region, Japan stood out, with '61% of Japan funds outperforming (+0.40%),' while Asia Pacific ex-Japan lagged, with just 38% outperforming and a negative median relative return. Related articles Growth funds favor Makemytrip and SK Hynix: BofA BofA sees improving ad market boosting Roku's outlook as it lifts target Morgan Stanley sees 'a compelling catalyst' for Salesforce stock rally 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
26-06-2025
- Business
- Yahoo
Shell denies that it's pursuing a bid for BP, says no talks underway; stock up
-- Shell (NYSE:SHEL) (LON:SHEL) on Thursday denied it was planning a takeover of BP (NYSE:BP), saying it is not pursuing a bid and is not actively considering one. The company also said that under U.K. regulations, making such a statement prevents it from making a formal offer for the next six months. Shell's U.S.-listed shares rose 2% in premarket trading on the news by 05:22 ET, while BP shares slipped nearly 1%. "Intensified speculation looks likely to see a degree of bid spec/ activism premium stick in BP shares for the immediate future," JPMorgan analysts said in a note. The response came after a Wall Street Journal (WSJ) report on Wednesday claimed Shell was in discussions to acquire BP. 'In response to recent media speculation Shell wishes to clarify that it has not been actively considering making an offer for BP and confirms it has not made an approach to, and no talks have taken place with, BP with regards to a possible offer,' the oil giant said in the release. 'This is a statement to which Rule 2.8 of the Code applies and accordingly Shell confirms it has no intention of making an offer for BP. As a result Shell will be bound by the restrictions set out in Rule 2.8 of the Code,' it added. The WSJ reported that Shell was in 'early-stage talks' to buy BP, citing sources familiar with the matter. The report said that the discussions between the two companies are 'active,' with BP said to be weighing the approach 'carefully.' "We think market discussions are now likely to move towards trying to better understand the credibility and source of the latest news," UBS analysts commented. "Shell may have denied talks are taking place but, no matter how unlikely a combination might be, we think the market will increase the probability of a deal happening, leading to an overhang on the shares in the near-term," they added. "Any merger would require a rewriting of the Shell investment case which we believe, at least initially, would come to the detriment of shareholder confidence." A potential acquisition of BP would present significant challenges for Shell, including a lengthy integration process, cultural differences, and likely divestments of overlapping assets. However, such a move could expand Shell's already significant trading footprint and strengthen its position in key areas like liquefied natural gas. Some analysts and investors believe the companies would be complementary in regions such as the Gulf of Mexico, now referred to by U.S. officials as the Gulf of America, the WSJ report added. Under U.K. takeover rules, the six-month restriction on Shell making an offer for more than 30% of BP's shares could be lifted if BP invites a bid or if a competing offer for the company is made. Related articles Shell denies that it's pursuing a bid for BP, says no talks underway; stock up Citi starts Sandisk at Buy on NAND recovery and enterprise SSD push; stock rises Goldman Sachs starts Dutch Bros at 'neutral' on valuation, growth prospects
Yahoo
26-06-2025
- Business
- Yahoo
Phoenix Spree Deutschland (LON:PSDL) shareholders have endured a 49% loss from investing in the stock three years ago
Many investors define successful investing as beating the market average over the long term. But in any portfolio, there are likely to be some stocks that fall short of that benchmark. Unfortunately, that's been the case for longer term Phoenix Spree Deutschland Limited (LON:PSDL) shareholders, since the share price is down 49% in the last three years, falling well short of the market return of around 25%. Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they've been consistent with returns. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. Given that Phoenix Spree Deutschland didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually desire strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size. Over three years, Phoenix Spree Deutschland grew revenue at 3.4% per year. That's not a very high growth rate considering it doesn't make profits. The stock dropped 14% during that time. If revenue growth accelerates, we might see the share price bounce. But ultimately the key will be whether the company can become profitability. You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values). You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic. Phoenix Spree Deutschland shareholders have received returns of 8.0% over twelve months, which isn't far from the general market return. To take a positive view, the gain is pleasing, and it sure beats annualized TSR loss of 7%, which was endured over half a decade. While 'turnarounds seldom turn' there are green shoots for Phoenix Spree Deutschland. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Take risks, for example - Phoenix Spree Deutschland has 1 warning sign we think you should be aware of. If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation). Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on British 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.
