Latest news with #LFECorporationBerhad
Yahoo
01-05-2025
- Business
- Yahoo
LFE Corporation Berhad's (KLSE:LFECORP) investors will be pleased with their decent 52% return over the last three years
While LFE Corporation Berhad (KLSE:LFECORP) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 17% in the last quarter. But don't let that distract from the very nice return generated over three years. In the last three years the share price is up, 52%: better than the market. With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies. Our free stock report includes 2 warning signs investors should be aware of before investing in LFE Corporation Berhad. Read for free now. While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS). LFE Corporation Berhad became profitable within the last three years. So we would expect a higher share price over the period. You can see how EPS has changed over time in the image below (click on the chart to see the exact values). It might be well worthwhile taking a look at our free report on LFE Corporation Berhad's earnings, revenue and cash flow. We're pleased to report that LFE Corporation Berhad shareholders have received a total shareholder return of 15% over one year. Having said that, the five-year TSR of 22% a year, is even better. It's always interesting to track share price performance over the longer term. But to understand LFE Corporation Berhad better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with LFE Corporation Berhad (at least 1 which is concerning) , and understanding them should be part of your investment process. Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Malaysian 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. Sign in to access your portfolio
Yahoo
04-04-2025
- Business
- Yahoo
LFE Corporation Berhad's (KLSE:LFECORP) Stock Has Been Sliding But Fundamentals Look Strong: Is The Market Wrong?
It is hard to get excited after looking at LFE Corporation Berhad's (KLSE:LFECORP) recent performance, when its stock has declined 21% over the past three months. But if you pay close attention, you might gather that its strong financials could mean that the stock could potentially see an increase in value in the long-term, given how markets usually reward companies with good financial health. Specifically, we decided to study LFE Corporation Berhad's ROE in this article. Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors' money. Simply put, it is used to assess the profitability of a company in relation to its equity capital. 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. Return on equity can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for LFE Corporation Berhad is: 24% = RM25m ÷ RM107m (Based on the trailing twelve months to December 2024). The 'return' is the income the business earned over the last year. One way to conceptualize this is that for each MYR1 of shareholders' capital it has, the company made MYR0.24 in profit. View our latest analysis for LFE Corporation Berhad We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. 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. Firstly, we acknowledge that LFE Corporation Berhad has a significantly high ROE. Secondly, even when compared to the industry average of 8.5% the company's ROE is quite impressive. As a result, LFE Corporation Berhad's exceptional 56% net income growth seen over the past five years, doesn't come as a surprise. As a next step, we compared LFE Corporation Berhad's net income growth with the industry, and pleasingly, we found that the growth seen by the company is higher than the average industry growth of 15%. The basis for attaching value to a company is, to a great extent, tied to its earnings growth. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. This then helps them determine if the stock is placed for a bright or bleak future. Is LFE Corporation Berhad fairly valued compared to other companies? These 3 valuation measures might help you decide. LFE Corporation Berhad doesn't pay any regular dividends currently which essentially means that it has been reinvesting all of its profits into the business. This definitely contributes to the high earnings growth number that we discussed above. In total, we are pretty happy with LFE Corporation Berhad's performance. In particular, it's great to see that the company is investing heavily into its business and along with a high rate of return, that has resulted in a sizeable growth in its earnings. If the company continues to grow its earnings the way it has, that could have a positive impact on its share price given how earnings per share influence long-term share prices. Not to forget, share price outcomes are also dependent on the potential risks a company may face. So it is important for investors to be aware of the risks involved in the business. To know the 2 risks we have identified for LFE Corporation Berhad visit our risks dashboard for free. 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
08-03-2025
- Business
- Yahoo
Impressive Earnings May Not Tell The Whole Story For LFE Corporation Berhad (KLSE:LFECORP)
Despite posting some strong earnings, the market for LFE Corporation Berhad's (KLSE:LFECORP) stock hasn't moved much. Our analysis suggests that this might be because shareholders have noticed some concerning underlying factors. See our latest analysis for LFE Corporation Berhad One key financial ratio used to measure how well a company converts its profit to free cash flow (FCF) is the accrual ratio. To get the accrual ratio we first subtract FCF from profit for a period, and then divide that number by the average operating assets for the period. This ratio tells us how much of a company's profit is not backed by free cashflow. That means a negative accrual ratio is a good thing, because it shows that the company is bringing in more free cash flow than its profit would suggest. While having an accrual ratio above zero is of little concern, we do think it's worth noting when a company has a relatively high accrual ratio. That's because some academic studies have suggested that high accruals ratios tend to lead to lower profit or less profit growth. For the year to December 2024, LFE Corporation Berhad had an accrual ratio of 0.28. We can therefore deduce that its free cash flow fell well short of covering its statutory profit, suggesting we might want to think twice before putting a lot of weight on the latter. Indeed, in the last twelve months it reported free cash flow of RM4.2m, which is significantly less than its profit of RM25.4m. LFE Corporation Berhad's free cash flow actually declined over the last year, but it may bounce back next year, since free cash flow is often more volatile than accounting profits. However, as we will discuss below, we can see that the company's accrual ratio has been impacted by its tax situation. This would certainly have contributed to the weak cash conversion. Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of LFE Corporation Berhad. Moving on from the accrual ratio, we note that LFE Corporation Berhad profited from a tax benefit which contributed RM6.6m to profit. It's always a bit noteworthy when a company is paid by the tax man, rather than paying the tax man. We're sure the company was pleased with its tax benefit. However, our data indicates that tax benefits can temporarily boost statutory profit in the year it is booked, but subsequently profit may fall back. In the likely event the tax benefit is not repeated, we'd expect to see its statutory profit levels drop, at least in the absence of strong growth. So while we think it's great to receive a tax benefit, it does tend to imply an increased risk that the statutory profit overstates the sustainable earnings power of the business. This year, LFE Corporation Berhad couldn't match its profit with cashflow. On top of that, the unsustainable nature of tax benefits mean that there's a chance profit may be lower next year, certainly in the absence of strong growth. Considering all this we'd argue LFE Corporation Berhad's profits probably give an overly generous impression of its sustainable level of profitability. If you want to do dive deeper into LFE Corporation Berhad, you'd also look into what risks it is currently facing. For instance, we've identified 2 warning signs for LFE Corporation Berhad (1 is significant) you should be familiar with. Our examination of LFE Corporation Berhad has focussed on certain factors that can make its earnings look better than they are. And, on that basis, we are somewhat skeptical. But there is always more to discover if you are capable of focussing your mind on minutiae. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful. 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.
