Latest news with #RM148m
Yahoo
10-04-2025
- Business
- Yahoo
Investors Shouldn't Overlook TAFI Industries Berhad's (KLSE:TAFI) Impressive 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. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. So when we looked at the ROCE trend of TAFI Industries Berhad (KLSE:TAFI) we really liked what we saw. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. To calculate this metric for TAFI Industries Berhad, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.21 = RM21m ÷ (RM248m - RM148m) (Based on the trailing twelve months to December 2024). So, TAFI Industries Berhad has an ROCE of 21%. In absolute terms that's a great return and it's even better than the Commercial Services industry average of 6.0%. Check out our latest analysis for TAFI Industries Berhad Historical performance is a great place to start when researching a stock so above you can see the gauge for TAFI Industries Berhad's ROCE against it's prior returns. If you're interested in investigating TAFI Industries Berhad's past further, check out this free graph covering TAFI Industries Berhad's past earnings, revenue and cash flow . The fact that TAFI Industries Berhad is now generating some pre-tax profits from its prior investments is very encouraging. Shareholders would no doubt be pleased with this because the business was loss-making five years ago but is is now generating 21% on its capital. Not only that, but the company is utilizing 141% more capital than before, but that's to be expected from a company trying to break into profitability. This can indicate that there's plenty of opportunities to invest capital internally and at ever higher rates, both common traits of a multi-bagger. For the record though, there was a noticeable increase in the company's current liabilities over the period, so we would attribute some of the ROCE growth to that. The current liabilities has increased to 60% of total assets, so the business is now more funded by the likes of its suppliers or short-term creditors. Given it's pretty high ratio, we'd remind investors that having current liabilities at those levels can bring about some risks in certain businesses. Long story short, we're delighted to see that TAFI Industries Berhad's reinvestment activities have paid off and the company is now profitable. Since the stock has returned a staggering 499% to shareholders over the last five years, it looks like investors are recognizing these changes. In light of that, we think it's worth looking further into this stock because if TAFI Industries Berhad can keep these trends up, it could have a bright future ahead. One final note, you should learn about the 2 warning signs we've spotted with TAFI Industries Berhad (including 1 which is a bit concerning) . High returns are a key ingredient to strong performance, so check out our free list ofstocks 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
23-03-2025
- Business
- Yahoo
ViTrox Corporation Berhad (KLSE:VITROX) Will Want To Turn Around Its Return Trends
If you're looking for a multi-bagger, there's a few things to keep an eye out for. 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. However, after investigating ViTrox Corporation Berhad (KLSE:VITROX), we don't think it's current trends fit the mold of a multi-bagger. 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 ViTrox Corporation Berhad is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.10 = RM107m ÷ (RM1.2b - RM148m) (Based on the trailing twelve months to December 2024). Therefore, ViTrox Corporation Berhad has an ROCE of 10%. In absolute terms, that's a satisfactory return, but compared to the Semiconductor industry average of 5.5% it's much better. See our latest analysis for ViTrox Corporation Berhad In the above chart we have measured ViTrox Corporation Berhad's prior ROCE against its prior performance, but the future is arguably more important. If you'd like, you can check out the forecasts from the analysts covering ViTrox Corporation Berhad for free. When we looked at the ROCE trend at ViTrox Corporation Berhad, we didn't gain much confidence. Around five years ago the returns on capital were 31%, but since then they've fallen to 10%. Meanwhile, the business is utilizing more capital but this hasn't moved the needle much in terms of sales in the past 12 months, so this could reflect longer term investments. 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. In summary, ViTrox Corporation Berhad is reinvesting funds back into the business for growth but unfortunately it looks like sales haven't increased much just yet. Since the stock has gained an impressive 60% over the last five years, investors must think there's better things to come. But if the trajectory of these underlying trends continue, we think the likelihood of it being a multi-bagger from here isn't high. If you're still interested in ViTrox Corporation Berhad it's worth checking out our to see if it's trading at an attractive price in other respects. 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. Sign in to access your portfolio
