Latest news with #CEKDBerhad
Yahoo
a day ago
- Business
- Yahoo
Returns On Capital At CEKD Berhad (KLSE:CEKD) Have Stalled
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. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. With that in mind, the ROCE of CEKD Berhad (KLSE:CEKD) looks decent, right now, so lets see what the trend of returns can tell us. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. 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. To calculate this metric for CEKD Berhad, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.14 = RM11m ÷ (RM82m - RM3.9m) (Based on the trailing twelve months to February 2025). Thus, CEKD Berhad has an ROCE of 14%. On its own, that's a standard return, however it's much better than the 7.8% generated by the Machinery industry. See our latest analysis for CEKD Berhad Historical performance is a great place to start when researching a stock so above you can see the gauge for CEKD Berhad's ROCE against it's prior returns. If you want to delve into the historical earnings , check out these free graphs detailing revenue and cash flow performance of CEKD Berhad. While the current returns on capital are decent, they haven't changed much. Over the past four years, ROCE has remained relatively flat at around 14% and the business has deployed 50% more capital into its operations. Since 14% is a moderate ROCE though, it's good to see a business can continue to reinvest at these decent rates of return. Over long periods of time, returns like these might not be too exciting, but with consistency they can pay off in terms of share price returns. To sum it up, CEKD Berhad has simply been reinvesting capital steadily, at those decent rates of return. Yet over the last three years the stock has declined 27%, so the decline might provide an opening. That's why we think it'd be worthwhile to look further into this stock given the fundamentals are appealing. One more thing to note, we've identified 2 warning signs with CEKD Berhad and understanding these should be part of your investment process. While CEKD Berhad 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. Sign in to access your portfolio
Yahoo
a day ago
- Business
- Yahoo
Returns On Capital At CEKD Berhad (KLSE:CEKD) Have Stalled
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. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. With that in mind, the ROCE of CEKD Berhad (KLSE:CEKD) looks decent, right now, so lets see what the trend of returns can tell us. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. 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. To calculate this metric for CEKD Berhad, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.14 = RM11m ÷ (RM82m - RM3.9m) (Based on the trailing twelve months to February 2025). Thus, CEKD Berhad has an ROCE of 14%. On its own, that's a standard return, however it's much better than the 7.8% generated by the Machinery industry. See our latest analysis for CEKD Berhad Historical performance is a great place to start when researching a stock so above you can see the gauge for CEKD Berhad's ROCE against it's prior returns. If you want to delve into the historical earnings , check out these free graphs detailing revenue and cash flow performance of CEKD Berhad. While the current returns on capital are decent, they haven't changed much. Over the past four years, ROCE has remained relatively flat at around 14% and the business has deployed 50% more capital into its operations. Since 14% is a moderate ROCE though, it's good to see a business can continue to reinvest at these decent rates of return. Over long periods of time, returns like these might not be too exciting, but with consistency they can pay off in terms of share price returns. To sum it up, CEKD Berhad has simply been reinvesting capital steadily, at those decent rates of return. Yet over the last three years the stock has declined 27%, so the decline might provide an opening. That's why we think it'd be worthwhile to look further into this stock given the fundamentals are appealing. One more thing to note, we've identified 2 warning signs with CEKD Berhad and understanding these should be part of your investment process. While CEKD Berhad 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
14-03-2025
- Business
- Yahoo
Is CEKD Berhad's (KLSE:CEKD) Stock Price Struggling As A Result Of Its Mixed Financials?
It is hard to get excited after looking at CEKD Berhad's (KLSE:CEKD) recent performance, when its stock has declined 22% over the past three months. It seems that the market might have completely ignored the positive aspects of the company's fundamentals and decided to weigh-in more on the negative aspects. Long-term fundamentals are usually what drive market outcomes, so it's worth paying close attention. Specifically, we decided to study CEKD Berhad's ROE in this article. Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. Put another way, it reveals the company's success at turning shareholder investments into profits. Check out our latest analysis for CEKD Berhad 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 CEKD Berhad is: 10% = RM7.5m ÷ RM73m (Based on the trailing twelve months to November 2024). The 'return' is the profit over the last twelve months. That means that for every MYR1 worth of shareholders' equity, the company generated MYR0.10 in profit. So far, we've learned that ROE is a measure of a company's profitability. Based on how much of its profits the company chooses to reinvest or "retain", we are then able to evaluate a company's future ability to generate profits. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics. On the face of it, CEKD Berhad's ROE is not much to talk about. However, the fact that the its ROE is quite higher to the industry average of 6.6% doesn't go unnoticed by us. Yet, CEKD Berhad has posted measly growth of 3.7% over the past five years. Bear in mind, the company does have a low ROE. It is just that the industry ROE is lower. Hence, this goes some way in explaining the low earnings growth. Next, on comparing with the industry net income growth, we found that CEKD Berhad's reported growth was lower than the industry growth of 8.6% over the last few years, which is not something we like to see. Earnings growth is a huge factor in stock valuation. It's important for an investor to know whether the market has priced in the company's expected earnings growth (or decline). By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. If you're wondering about CEKD Berhad's's valuation, check out this gauge of its price-to-earnings ratio, as compared to its industry. CEKD Berhad has a three-year median payout ratio of 62% (implying that it keeps only 38% of its profits), meaning that it pays out most of its profits to shareholders as dividends, and as a result, the company has seen low earnings growth. Additionally, CEKD Berhad started paying a dividend only recently. So it looks like the management must have perceived that shareholders favor dividends over earnings growth. Overall, we have mixed feelings about CEKD Berhad. Specifically, the low earnings growth is a bit concerning, especially given that the company has a respectable rate of return. Investors may have benefitted, had the company been reinvesting more of its earnings. As discussed earlier, the company is retaining a small portion of its profits. Wrapping up, we would proceed with caution with this company and one way of doing that would be to look at the risk profile of the business. Our risks dashboard would have the 2 risks we have identified for CEKD Berhad. 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 Error while retrieving data Error while retrieving data Error while retrieving data
