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Yahoo
04-05-2025
- Business
- Yahoo
Returns On Capital Signal Tricky Times Ahead For TMC Life Sciences Berhad (KLSE:TMCLIFE)
What trends should we look for it we want to identify stocks that can multiply in value over the long term? Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an expanding base of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. Having said that, from a first glance at TMC Life Sciences Berhad (KLSE:TMCLIFE) we aren't jumping out of our chairs at how returns are trending, but let's have a deeper look. 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. 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 TMC Life Sciences Berhad, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.02 = RM21m ÷ (RM1.1b - RM107m) (Based on the trailing twelve months to December 2024). Therefore, TMC Life Sciences Berhad has an ROCE of 2.0%. In absolute terms, that's a low return and it also under-performs the Healthcare industry average of 9.9%. View our latest analysis for TMC Life Sciences Berhad While the past is not representative of the future, it can be helpful to know how a company has performed historically, which is why we have this chart above. If you want to delve into the historical earnings , check out these free graphs detailing revenue and cash flow performance of TMC Life Sciences Berhad. On the surface, the trend of ROCE at TMC Life Sciences Berhad doesn't inspire confidence. Around five years ago the returns on capital were 4.1%, but since then they've fallen to 2.0%. On the other hand, the company has been employing more capital without a corresponding improvement in sales in the last year, which could suggest these investments are longer term plays. It's worth keeping an eye on the company's earnings from here on to see if these investments do end up contributing to the bottom line. To conclude, we've found that TMC Life Sciences Berhad is reinvesting in the business, but returns have been falling. And in the last five years, the stock has given away 12% so the market doesn't look too hopeful on these trends strengthening any time soon. Therefore based on the analysis done in this article, we don't think TMC Life Sciences Berhad has the makings of a multi-bagger. If you want to continue researching TMC Life Sciences Berhad, you might be interested to know about the 2 warning signs that our analysis has discovered. While TMC Life Sciences 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
21-04-2025
- Business
- Yahoo
Kerjaya Prospek Group Berhad's (KLSE:KERJAYA) Stock Has Shown Weakness Lately But Financial Prospects Look Decent: Is The Market Wrong?
Kerjaya Prospek Group Berhad (KLSE:KERJAYA) has had a rough three months with its share price down 4.7%. However, stock prices are usually driven by a company's financials over the long term, which in this case look pretty respectable. Particularly, we will be paying attention to Kerjaya Prospek Group Berhad's ROE today. Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors' money. Put another way, it reveals the company's success at turning shareholder investments into profits. 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. The formula for ROE is: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Kerjaya Prospek Group Berhad is: 14% = RM160m ÷ RM1.1b (Based on the trailing twelve months to December 2024). The 'return' is the income the business earned over the last year. That means that for every MYR1 worth of shareholders' equity, the company generated MYR0.14 in profit. See our latest analysis for Kerjaya Prospek Group Berhad 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. At first glance, Kerjaya Prospek Group Berhad seems to have a decent ROE. On comparing with the average industry ROE of 8.5% the company's ROE looks pretty remarkable. This certainly adds some context to Kerjaya Prospek Group Berhad's decent 7.0% net income growth seen over the past five years. As a next step, we compared Kerjaya Prospek Group Berhad's net income growth with the industry and were disappointed to see that the company's growth is lower than the industry average growth of 15% in the same period. Earnings growth is an important metric to consider when valuing a stock. 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. One good indicator of expected earnings growth is the P/E ratio which determines the price the market is willing to pay for a stock based on its earnings prospects. So, you may want to check if Kerjaya Prospek Group Berhad is trading on a high P/E or a low P/E, relative to its industry. Kerjaya Prospek Group Berhad has a significant three-year median payout ratio of 75%, meaning that it is left with only 25% to reinvest into its business. This implies that the company has been able to achieve decent earnings growth despite returning most of its profits to shareholders. Additionally, Kerjaya Prospek Group Berhad has paid dividends over a period of at least ten years which means that the company is pretty serious about sharing its profits with shareholders. Our latest analyst data shows that the future payout ratio of the company over the next three years is expected to be approximately 67%. Still, forecasts suggest that Kerjaya Prospek Group Berhad's future ROE will rise to 18% even though the the company's payout ratio is not expected to change by much. On the whole, we do feel that Kerjaya Prospek Group Berhad has some positive attributes. Its earnings growth is decent, and the high ROE does contribute to that growth. However, investors could have benefitted even more from the high ROE, had the company been reinvesting more of its earnings. With that said, the latest industry analyst forecasts reveal that the company's earnings are expected to accelerate. To know more about the company's future earnings growth forecasts take a look at this free report on analyst forecasts for the company to find out more. 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
13-04-2025
- Business
- Yahoo
PETRONAS Dagangan Berhad's (KLSE:PETDAG) Stock Is Going Strong: Is the Market Following Fundamentals?
Most readers would already be aware that PETRONAS Dagangan Berhad's (KLSE:PETDAG) stock increased significantly by 11% over the past month. Since the market usually pay for a company's long-term fundamentals, we decided to study the company's key performance indicators to see if they could be influencing the market. Particularly, we will be paying attention to PETRONAS Dagangan Berhad's ROE today. 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. In short, ROE shows the profit each dollar generates with respect to its shareholder investments. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. ROE 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 PETRONAS Dagangan Berhad is: 18% = RM1.1b ÷ RM6.1b (Based on the trailing twelve months to December 2024). The 'return' is the profit over the last twelve months. Another way to think of that is that for every MYR1 worth of equity, the company was able to earn MYR0.18 in profit. Check out our latest analysis for PETRONAS Dagangan Berhad Thus far, we have learned that ROE measures how efficiently a company is generating its profits. 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. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don't share these attributes. At first glance, PETRONAS Dagangan Berhad seems to have a decent ROE. On comparing with the average industry ROE of 8.8% the company's ROE looks pretty remarkable. This probably laid the ground for PETRONAS Dagangan Berhad's moderate 19% net income growth seen over the past five years. As a next step, we compared PETRONAS Dagangan Berhad's net income growth with the industry and found that the company has a similar growth figure when compared with the industry average growth rate of 19% in the same period. Earnings growth is a huge factor in stock valuation. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. Has the market priced in the future outlook for PETDAG? You can find out in our latest intrinsic value infographic research report. PETRONAS Dagangan Berhad has a significant three-year median payout ratio of 87%, meaning that it is left with only 13% to reinvest into its business. This implies that the company has been able to achieve decent earnings growth despite returning most of its profits to shareholders. Besides, PETRONAS Dagangan Berhad has been paying dividends for at least ten years or more. This shows that the company is committed to sharing profits with its shareholders. Our latest analyst data shows that the future payout ratio of the company over the next three years is expected to be approximately 94%. As a result, PETRONAS Dagangan Berhad's ROE is not expected to change by much either, which we inferred from the analyst estimate of 17% for future ROE. In total, we are pretty happy with PETRONAS Dagangan Berhad's performance. In particular, its high ROE is quite noteworthy and also the probable explanation behind its considerable earnings growth. Yet, the company is retaining a small portion of its profits. Which means that the company has been able to grow its earnings in spite of it, so that's not too bad. Having said that, the company's earnings growth is expected to slow down, as forecasted in the current analyst estimates. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company. 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
MGB Berhad (KLSE:MGB) Is Experiencing Growth In Returns On Capital
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. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. Speaking of which, we noticed some great changes in MGB Berhad's (KLSE:MGB) returns on capital, so let's have a look. 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 you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. The formula for this calculation on MGB Berhad is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.12 = RM80m ÷ (RM1.1b - RM449m) (Based on the trailing twelve months to December 2024). So, MGB Berhad has an ROCE of 12%. In absolute terms, that's a pretty normal return, and it's somewhat close to the Construction industry average of 10.0%. Check out our latest analysis for MGB Berhad Above you can see how the current ROCE for MGB Berhad compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like, you can check out the forecasts from the analysts covering MGB Berhad for free. The trends we've noticed at MGB Berhad are quite reassuring. Over the last five years, returns on capital employed have risen substantially to 12%. The company is effectively making more money per dollar of capital used, and it's worth noting that the amount of capital has increased too, by 30%. The increasing returns on a growing amount of capital is common amongst multi-baggers and that's why we're impressed. All in all, it's terrific to see that MGB Berhad is reaping the rewards from prior investments and is growing its capital base. Considering the stock has delivered 16% to its stockholders over the last five years, it may be fair to think that investors aren't fully aware of the promising trends yet. So exploring more about this stock could uncover a good opportunity, if the valuation and other metrics stack up. MGB Berhad does have some risks though, and we've spotted 2 warning signs for MGB Berhad that you might be interested in. 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.
Yahoo
18-03-2025
- Business
- Yahoo
Is Now The Time To Put Pecca Group Berhad (KLSE:PECCA) On Your Watchlist?
For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and profit. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should. So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Pecca Group Berhad (KLSE:PECCA). Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business. Check out our latest analysis for Pecca Group Berhad Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. Recognition must be given to the that Pecca Group Berhad has grown EPS by 59% per year, over the last three years. While that sort of growth rate isn't sustainable for long, it certainly catches the eye of prospective investors. It's often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company's growth. We note that while EBIT margins have improved from 24% to 32%, the company has actually reported a fall in revenue by 3.9%. That's not a good look. You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image. Since Pecca Group Berhad is no giant, with a market capitalisation of RM1.1b, you should definitely check its cash and debt before getting too excited about its prospects. It's pleasing to see company leaders with putting their money on the line, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. So it is good to see that Pecca Group Berhad insiders have a significant amount of capital invested in the stock. As a matter of fact, their holding is valued at RM219m. That shows significant buy-in, and may indicate conviction in the business strategy. That amounts to 20% of the company, demonstrating a degree of high-level alignment with shareholders. Pecca Group Berhad's earnings per share growth have been climbing higher at an appreciable rate. That sort of growth is nothing short of eye-catching, and the large investment held by insiders should certainly brighten the view of the company. At times fast EPS growth is a sign the business has reached an inflection point, so there's a potential opportunity to be had here. So based on this quick analysis, we do think it's worth considering Pecca Group Berhad for a spot on your watchlist. Still, you should learn about the 1 warning sign we've spotted with Pecca Group Berhad. Although Pecca Group Berhad certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see companies with more skin in the game, then check out this handpicked selection of Malaysian companies that not only boast of strong growth but have strong insider backing. Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction. 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.
