Latest news with #RM141m
Yahoo
21-04-2025
- Business
- Yahoo
Be Wary Of SAM Engineering & Equipment (M) Berhad (KLSE:SAM) And Its Returns On Capital
Did you know there are some financial metrics that can provide clues of a potential multi-bagger? In a perfect world, we'd like to see a company investing more capital into its business and ideally the returns earned from that capital are also increasing. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. In light of that, when we looked at SAM Engineering & Equipment (M) Berhad (KLSE:SAM) and its ROCE trend, we weren't exactly thrilled. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. Analysts use this formula to calculate it for SAM Engineering & Equipment (M) Berhad: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.092 = RM141m ÷ (RM1.9b - RM396m) (Based on the trailing twelve months to December 2024). Therefore, SAM Engineering & Equipment (M) Berhad has an ROCE of 9.2%. On its own, that's a low figure but it's around the 8.2% average generated by the Machinery industry. View our latest analysis for SAM Engineering & Equipment (M) Berhad Above you can see how the current ROCE for SAM Engineering & Equipment (M) Berhad compares to its prior returns on capital, but there's only so much you can tell from the past. If you're interested, you can view the analysts predictions in our free analyst report for SAM Engineering & Equipment (M) Berhad . The trend of ROCE doesn't look fantastic because it's fallen from 17% five years ago, while the business's capital employed increased by 143%. Usually this isn't ideal, but given SAM Engineering & Equipment (M) Berhad conducted a capital raising before their most recent earnings announcement, that would've likely contributed, at least partially, to the increased capital employed figure. It's unlikely that all of the funds raised have been put to work yet, so as a consequence SAM Engineering & Equipment (M) Berhad might not have received a full period of earnings contribution from it. Bringing it all together, while we're somewhat encouraged by SAM Engineering & Equipment (M) Berhad's reinvestment in its own business, we're aware that returns are shrinking. Yet to long term shareholders the stock has gifted them an incredible 140% return in the last five years, so the market appears to be rosy about its future. Ultimately, if the underlying trends persist, we wouldn't hold our breath on it being a multi-bagger going forward. SAM Engineering & Equipment (M) Berhad could be trading at an attractive price in other respects, so you might find our on our platform quite valuable. While SAM Engineering & Equipment (M) 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
21-04-2025
- Business
- Yahoo
Be Wary Of SAM Engineering & Equipment (M) Berhad (KLSE:SAM) And Its Returns On Capital
Did you know there are some financial metrics that can provide clues of a potential multi-bagger? In a perfect world, we'd like to see a company investing more capital into its business and ideally the returns earned from that capital are also increasing. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. In light of that, when we looked at SAM Engineering & Equipment (M) Berhad (KLSE:SAM) and its ROCE trend, we weren't exactly thrilled. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. Analysts use this formula to calculate it for SAM Engineering & Equipment (M) Berhad: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.092 = RM141m ÷ (RM1.9b - RM396m) (Based on the trailing twelve months to December 2024). Therefore, SAM Engineering & Equipment (M) Berhad has an ROCE of 9.2%. On its own, that's a low figure but it's around the 8.2% average generated by the Machinery industry. View our latest analysis for SAM Engineering & Equipment (M) Berhad Above you can see how the current ROCE for SAM Engineering & Equipment (M) Berhad compares to its prior returns on capital, but there's only so much you can tell from the past. If you're interested, you can view the analysts predictions in our free analyst report for SAM Engineering & Equipment (M) Berhad . The trend of ROCE doesn't look fantastic because it's fallen from 17% five years ago, while the business's capital employed increased by 143%. Usually this isn't ideal, but given SAM Engineering & Equipment (M) Berhad conducted a capital raising before their most recent earnings announcement, that would've likely contributed, at least partially, to the increased capital employed figure. It's unlikely that all of the funds raised have been put to work yet, so as a consequence SAM Engineering & Equipment (M) Berhad might not have received a full period of earnings contribution from it. Bringing it all together, while we're somewhat encouraged by SAM Engineering & Equipment (M) Berhad's reinvestment in its own business, we're aware that returns are shrinking. Yet to long term shareholders the stock has gifted them an incredible 140% return in the last five years, so the market appears to be rosy about its future. Ultimately, if the underlying trends persist, we wouldn't hold our breath on it being a multi-bagger going forward. SAM Engineering & Equipment (M) Berhad could be trading at an attractive price in other respects, so you might find our on our platform quite valuable. While SAM Engineering & Equipment (M) 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
06-02-2025
- Business
- Yahoo
AGX Group Berhad's (KLSE:AGX) Returns On Capital Not Reflecting Well On The Business
Did you know there are some financial metrics that can provide clues of a potential multi-bagger? Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an expanding base of capital employed. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. Although, when we looked at AGX Group Berhad (KLSE:AGX), it didn't seem to tick all of these boxes. 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. The formula for this calculation on AGX Group Berhad is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.16 = RM17m ÷ (RM141m - RM35m) (Based on the trailing twelve months to September 2024). So, AGX Group Berhad has an ROCE of 16%. On its own, that's a standard return, however it's much better than the 5.4% generated by the Logistics industry. See our latest analysis for AGX Group 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're interested in investigating AGX Group Berhad's past further, check out this free graph covering AGX Group Berhad's past earnings, revenue and cash flow. When we looked at the ROCE trend at AGX Group Berhad, we didn't gain much confidence. To be more specific, ROCE has fallen from 34% over the last three years. Although, given both revenue and the amount of assets employed in the business have increased, it could suggest the company is investing in growth, and the extra capital has led to a short-term reduction in ROCE. And if the increased capital generates additional returns, the business, and thus shareholders, will benefit in the long run. On a related note, AGX Group Berhad has decreased its current liabilities to 25% of total assets. That could partly explain why the ROCE has dropped. What's more, this can reduce some aspects of risk to the business because now the company's suppliers or short-term creditors are funding less of its operations. Some would claim this reduces the business' efficiency at generating ROCE since it is now funding more of the operations with its own money. While returns have fallen for AGX Group Berhad in recent times, we're encouraged to see that sales are growing and that the business is reinvesting in its operations. And the stock has followed suit returning a meaningful 53% to shareholders over the last year. So while investors seem to be recognizing these promising trends, we would look further into this stock to make sure the other metrics justify the positive view. One more thing, we've spotted 2 warning signs facing AGX Group Berhad that you might find interesting. While AGX Group Berhad 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.
