Earnings playbook: The reporting season heats up with Alphabet and Tesla on deck
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Yahoo
10 minutes ago
- Yahoo
Does JOST Werke SE (ETR:JST) Create Value For Shareholders?
While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. By way of learning-by-doing, we'll look at ROE to gain a better understanding of JOST Werke SE (ETR:JST). ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. Simply put, it is used to assess the profitability of a company in relation to its equity capital. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. How Is ROE Calculated? The formula for return on equity is: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for JOST Werke is: 11% = €46m ÷ €406m (Based on the trailing twelve months to March 2025). The 'return' refers to a company's earnings over the last year. Another way to think of that is that for every €1 worth of equity, the company was able to earn €0.11 in profit. See our latest analysis for JOST Werke Does JOST Werke Have A Good Return On Equity? By comparing a company's ROE with its industry average, we can get a quick measure of how good it is. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. If you look at the image below, you can see JOST Werke has a similar ROE to the average in the Machinery industry classification (10%). That isn't amazing, but it is respectable. Even if the ROE is respectable when compared to the industry, its worth checking if the firm's ROE is being aided by high debt levels. If a company takes on too much debt, it is at higher risk of defaulting on interest payments. Our risks dashboardshould have the 3 risks we have identified for JOST Werke. Why You Should Consider Debt When Looking At ROE Companies usually need to invest money to grow their profits. That cash can come from issuing shares, retained earnings, or debt. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the debt required for growth will boost returns, but will not impact the shareholders' equity. In this manner the use of debt will boost ROE, even though the core economics of the business stay the same. JOST Werke's Debt And Its 11% ROE JOST Werke clearly uses a high amount of debt to boost returns, as it has a debt to equity ratio of 1.52. With a fairly low ROE, and significant use of debt, it's hard to get excited about this business at the moment. Debt does bring extra risk, so it's only really worthwhile when a company generates some decent returns from it. Summary Return on equity is one way we can compare its business quality of different companies. A company that can achieve a high return on equity without debt could be considered a high quality business. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE. Having said that, while ROE is a useful indicator of business quality, you'll have to look at a whole range of factors to determine the right price to buy a stock. It is important to consider other factors, such as future profit growth -- and how much investment is required going forward. So I think it may be worth checking this free report on analyst forecasts for the company. If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt. 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
CNBC
12 minutes ago
- CNBC
U.S. firms scramble to secure rare-earth magnets — imports from China surge 660%
China's exports of rare-earth magnets to the United States in June surged more than seven times from the prior month, as American firms clamor to get hold of the critical elements following a preliminary Sino-U.S. trade deal. In April, Beijing placed restrictions on several critical magnets, used in advanced tech such as electric vehicles, wind turbines and MRI machines, requiring firms to receive licenses for export. The move was seen as retaliation against U.S. President Donald Trump's steep tariffs on China. Beijing has a stranglehold on the production of rare-earth magnets, with an estimated 90% of the market, as well as a similar hold on the refining of rare-earth elements, which are used to make magnets. The U.S. received about 353 metric tons of rare-earth permanent magnets in June, up 660% from the previous month, data released by the General Administration of Customs showed, though the exports were about half that from June last year. The U.S. was the second-largest destination for China's rare-earth magnets, behind Germany, as it relies heavily on their imports for its large manufacturing sector, particularly in automotive, electronics, and renewable energy. In total, China exported 3,188 metric tons of rare earth permanent magnets globally last month, up nearly 160% from May, but 38% lower compared with the same period last year. The growth in exports came after Washington and Beijing agreed last month on a trade framework that included easing controls on Chinese rare-earth exports as well as a rollback of some American tech restrictions for shipments to China. AI behemoth Nvidia said last week it was planning to resume shipments of its H20 AI chips to China, after the exports were restricted in April. Last month, controls on American AI chip software companies' business in China had also been rolled back. Chinese rare-earth magnet producers started announcing the approval of export licenses last month. If exports continue to increase, it will be of great benefit to companies that have been suffering from shortages of magnets due to the lengthy time required to secure export licenses. For example, several European auto-parts suppliers were forced to halt production in recent months. The magnet shortages had also hit emerging industries such as humanoid robotics. In April, Elon Musk said production of Tesla's Optimus humanoid robots had been disrupted. China's controls on its rare-earths sector have prompted some global governments to reexamine their rare-earth supply chains and search for ways to support domestic mining of the minerals. However, experts say that setting up alternatives to China's rare-earth magnet supply chain could take years, as it requires an intricate process of rare-earth element refining and separation. "The separation process is quite complex, and China has a lot of advantages in this after putting in decades of research into the processes," Yue Wang, a senior consultant of rare earths at Wood Mackenzie, told CNBC last month. One way that the U.S. has been trying to compensate for lack of rare-earth magnets is through increased recycling. Apple and miner MP Materials announced a $500 million deal last week for the development of a recycling facility that will reinforce the iPhone maker's U.S. magnet supply chain. Peter Alexander from financial consultancy Z-ben Advisors said that Washington's latest concessions on tech restrictions were a reflection of just how much leverage China has in its trade relationship with the United States, speaking on CNBC's "China Connection" on Monday.
Business Insider
20 minutes ago
- Business Insider
Amazon slowly increased the costs of hundreds of essentials, WSJ says
Since President Trump first announced sweeping tariffs, Amazon has raised prices on low-cost products, Shane Shifflett, nate Rattner, Sebastian Herrera, and Brian Whitton of The Wall Street Journal reports, citing an analysis done by the journal on nearly 2,500 items. On average, the prices of inexpensive goods, such as deodorant, protein shakes and pet care items, increased by approximately 5% in July. Overall, Amazon lowered its prices on expensive items and raised the prices on cheaper goods. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week.
