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Yahoo
23-05-2025
- Business
- Yahoo
There's Been No Shortage Of Growth Recently For Adventa Berhad's (KLSE:ADVENTA) Returns On Capital
Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key financial metrics. One common approach is to try and find a company with returns on capital employed (ROCE) that are increasing, in conjunction with a growing amount 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. Speaking of which, we noticed some great changes in Adventa Berhad's (KLSE:ADVENTA) 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. 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 Adventa Berhad, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.0078 = RM807k ÷ (RM117m - RM14m) (Based on the trailing twelve months to March 2025). Therefore, Adventa Berhad has an ROCE of 0.8%. Ultimately, that's a low return and it under-performs the Medical Equipment industry average of 7.9%. Check out our latest analysis for Adventa 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 Adventa Berhad. We're delighted to see that Adventa Berhad is reaping rewards from its investments and is now generating some pre-tax profits. About five years ago the company was generating losses but things have turned around because it's now earning 0.8% on its capital. In addition to that, Adventa Berhad is employing 50% more capital than previously which is expected of a company that's trying to break into profitability. This can tell us that the company has plenty of reinvestment opportunities that are able to generate higher returns. On a related note, the company's ratio of current liabilities to total assets has decreased to 12%, which basically reduces it's funding from the likes of short-term creditors or suppliers. Therefore we can rest assured that the growth in ROCE is a result of the business' fundamental improvements, rather than a cooking class featuring this company's books. Long story short, we're delighted to see that Adventa Berhad's reinvestment activities have paid off and the company is now profitable. Although the company may be facing some issues elsewhere since the stock has plunged 82% in the last five years. Regardless, we think the underlying fundamentals warrant this stock for further investigation. One more thing to note, we've identified 1 warning sign with Adventa Berhad and understanding this should be part of your investment process. 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
18-04-2025
- Business
- Yahoo
The Returns On Capital At Autocount Dotcom Berhad (KLSE:ADB) Don't Inspire Confidence
What are the early trends we should look for to identify a stock that could multiply in value over the long term? Amongst other things, we'll want to see two things; firstly, a growing return on capital employed (ROCE) and secondly, an expansion in the company's amount of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. Looking at Autocount Dotcom Berhad (KLSE:ADB), it does have a high ROCE right now, but lets see how returns are trending. Our free stock report includes 2 warning signs investors should be aware of before investing in Autocount Dotcom Berhad. Read for free now. For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. Analysts use this formula to calculate it for Autocount Dotcom Berhad: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.38 = RM24m ÷ (RM76m - RM14m) (Based on the trailing twelve months to December 2024). Thus, Autocount Dotcom Berhad has an ROCE of 38%. In absolute terms that's a great return and it's even better than the Software industry average of 16%. View our latest analysis for Autocount Dotcom Berhad Historical performance is a great place to start when researching a stock so above you can see the gauge for Autocount Dotcom Berhad's ROCE against it's prior returns. If you're interested in investigating Autocount Dotcom Berhad's past further, check out this free graph covering Autocount Dotcom Berhad's past earnings, revenue and cash flow. When we looked at the ROCE trend at Autocount Dotcom Berhad, we didn't gain much confidence. While it's comforting that the ROCE is high, five years ago it was 48%. However, given capital employed and revenue have both increased it appears that the business is currently pursuing growth, at the consequence of short term returns. And if the increased capital generates additional returns, the business, and thus shareholders, will benefit in the long run. On a related note, Autocount Dotcom Berhad has decreased its current liabilities to 18% of total assets. That could partly explain why the ROCE has dropped. Effectively this means their suppliers or short-term creditors are funding less of the business, which reduces some elements of risk. Since the business is basically funding more of its operations with it's own money, you could argue this has made the business less efficient at generating ROCE. In summary, despite lower returns in the short term, we're encouraged to see that Autocount Dotcom Berhad is reinvesting for growth and has higher sales as a result. These trends are starting to be recognized by investors since the stock has delivered a 6.4% gain to shareholders who've held over the last year. Therefore we'd recommend looking further into this stock to confirm if it has the makings of a good investment. Autocount Dotcom Berhad does have some risks though, and we've spotted 2 warning signs for Autocount Dotcom Berhad that you might be interested in. If you want to search for more stocks that have been earning high returns, check out this free list of stocks with solid balance sheets that are also earning 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
Yahoo
17-04-2025
- Business
- Yahoo
NTPM Holdings Berhad's (KLSE:NTPM) Returns On Capital Not Reflecting Well On The Business
When it comes to investing, there are some useful financial metrics that can warn us when a business is potentially in trouble. When we see a declining return on capital employed (ROCE) in conjunction with a declining base of capital employed, that's often how a mature business shows signs of aging. Ultimately this means that the company is earning less per dollar invested and on top of that, it's shrinking its base of capital employed. In light of that, from a first glance at NTPM Holdings Berhad (KLSE:NTPM), we've spotted some signs that it could be struggling, so let's investigate. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. The formula for this calculation on NTPM Holdings Berhad is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.025 = RM14m ÷ (RM1.0b - RM459m) (Based on the trailing twelve months to January 2025). Thus, NTPM Holdings Berhad has an ROCE of 2.5%. In absolute terms, that's a low return and it also under-performs the Household Products industry average of 11%. View our latest analysis for NTPM Holdings Berhad Historical performance is a great place to start when researching a stock so above you can see the gauge for NTPM Holdings 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 NTPM Holdings Berhad. There is reason to be cautious about NTPM Holdings Berhad, given the returns are trending downwards. About five years ago, returns on capital were 4.1%, however they're now substantially lower than that as we saw above. Meanwhile, capital employed in the business has stayed roughly the flat over the period. Since returns are falling and the business has the same amount of assets employed, this can suggest it's a mature business that hasn't had much growth in the last five years. If these trends continue, we wouldn't expect NTPM Holdings Berhad to turn into a multi-bagger. Another thing to note, NTPM Holdings Berhad has a high ratio of current liabilities to total assets of 44%. This effectively means that suppliers (or short-term creditors) are funding a large portion of the business, so just be aware that this can introduce some elements of risk. While it's not necessarily a bad thing, it can be beneficial if this ratio is lower. In summary, it's unfortunate that NTPM Holdings Berhad is generating lower returns from the same amount of capital. Long term shareholders who've owned the stock over the last five years have experienced a 30% depreciation in their investment, so it appears the market might not like these trends either. That being the case, unless the underlying trends revert to a more positive trajectory, we'd consider looking elsewhere. One more thing: We've identified 3 warning signs with NTPM Holdings Berhad (at least 2 which are a bit unpleasant) , and understanding them would certainly be useful. If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive 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
16-04-2025
- Business
- Yahoo
SLP Resources Berhad's (KLSE:SLP) Dismal Stock Performance Reflects Weak Fundamentals
With its stock down 5.6% over the past month, it is easy to disregard SLP Resources Berhad (KLSE:SLP). Given that stock prices are usually driven by a company's fundamentals over the long term, which in this case look pretty weak, we decided to study the company's key financial indicators. Specifically, we decided to study SLP Resources 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. Put another way, it reveals the company's success at turning shareholder investments into profits. Our free stock report includes 2 warning signs investors should be aware of before investing in SLP Resources Berhad. Read for free now. The formula for ROE is: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for SLP Resources Berhad is: 7.5% = RM14m ÷ RM188m (Based on the trailing twelve months to December 2024). The 'return' is the amount earned after tax over the last twelve months. That means that for every MYR1 worth of shareholders' equity, the company generated MYR0.07 in profit. Check out our latest analysis for SLP Resources Berhad So far, we've learned that ROE is a measure of a company's profitability. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. 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. When you first look at it, SLP Resources Berhad's ROE doesn't look that attractive. However, its ROE is similar to the industry average of 7.7%, so we won't completely dismiss the company. But then again, SLP Resources Berhad's five year net income shrunk at a rate of 9.6%. Bear in mind, the company does have a slightly low ROE. So that's what might be causing earnings growth to shrink. However, when we compared SLP Resources Berhad's growth with the industry we found that while the company's earnings have been shrinking, the industry has seen an earnings growth of 7.8% in the same period. This is quite worrisome. 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). Doing so will help them establish if the stock's future looks promising or ominous. Is SLP Resources Berhad fairly valued compared to other companies? These 3 valuation measures might help you decide. SLP Resources Berhad's very high three-year median payout ratio of 108% over the last three years suggests that the company is paying its shareholders more than what it is earning and this explains the company's shrinking earnings. Its usually very hard to sustain dividend payments that are higher than reported profits. To know the 2 risks we have identified for SLP Resources Berhad visit our risks dashboard for free. In addition, SLP Resources Berhad has been paying dividends over a period of at least ten years suggesting that keeping up dividend payments is way more important to the management even if it comes at the cost of business growth. Our latest analyst data shows that the future payout ratio of the company over the next three years is expected to be approximately 94%. On the whole, SLP Resources Berhad's performance is quite a big let-down. Particularly, its ROE is a huge disappointment, not to mention its lack of proper reinvestment into the business. As a result its earnings growth has also been quite disappointing. That being so, the latest industry analyst forecasts show that the analysts are expecting to see a huge improvement in the company's earnings growth rate. 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.
Yahoo
15-04-2025
- Business
- Yahoo
SLP Resources Berhad's (KLSE:SLP) Dismal Stock Performance Reflects Weak Fundamentals
With its stock down 5.6% over the past month, it is easy to disregard SLP Resources Berhad (KLSE:SLP). Given that stock prices are usually driven by a company's fundamentals over the long term, which in this case look pretty weak, we decided to study the company's key financial indicators. Specifically, we decided to study SLP Resources 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. Put another way, it reveals the company's success at turning shareholder investments into profits. Our free stock report includes 2 warning signs investors should be aware of before investing in SLP Resources Berhad. Read for free now. The formula for ROE is: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for SLP Resources Berhad is: 7.5% = RM14m ÷ RM188m (Based on the trailing twelve months to December 2024). The 'return' is the amount earned after tax over the last twelve months. That means that for every MYR1 worth of shareholders' equity, the company generated MYR0.07 in profit. Check out our latest analysis for SLP Resources Berhad So far, we've learned that ROE is a measure of a company's profitability. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. 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. When you first look at it, SLP Resources Berhad's ROE doesn't look that attractive. However, its ROE is similar to the industry average of 7.7%, so we won't completely dismiss the company. But then again, SLP Resources Berhad's five year net income shrunk at a rate of 9.6%. Bear in mind, the company does have a slightly low ROE. So that's what might be causing earnings growth to shrink. However, when we compared SLP Resources Berhad's growth with the industry we found that while the company's earnings have been shrinking, the industry has seen an earnings growth of 7.8% in the same period. This is quite worrisome. 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). Doing so will help them establish if the stock's future looks promising or ominous. Is SLP Resources Berhad fairly valued compared to other companies? These 3 valuation measures might help you decide. SLP Resources Berhad's very high three-year median payout ratio of 108% over the last three years suggests that the company is paying its shareholders more than what it is earning and this explains the company's shrinking earnings. Its usually very hard to sustain dividend payments that are higher than reported profits. To know the 2 risks we have identified for SLP Resources Berhad visit our risks dashboard for free. In addition, SLP Resources Berhad has been paying dividends over a period of at least ten years suggesting that keeping up dividend payments is way more important to the management even if it comes at the cost of business growth. Our latest analyst data shows that the future payout ratio of the company over the next three years is expected to be approximately 94%. On the whole, SLP Resources Berhad's performance is quite a big let-down. Particularly, its ROE is a huge disappointment, not to mention its lack of proper reinvestment into the business. As a result its earnings growth has also been quite disappointing. That being so, the latest industry analyst forecasts show that the analysts are expecting to see a huge improvement in the company's earnings growth rate. 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
