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Yahoo
05-05-2025
- Business
- Yahoo
Capital Investments At Powerwell Holdings Berhad (KLSE:PWRWELL) Point To A Promising Future
Did you know there are some financial metrics that can provide clues of a potential multi-bagger? 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. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. That's why when we briefly looked at Powerwell Holdings Berhad's (KLSE:PWRWELL) ROCE trend, we were very happy with what we saw. Our free stock report includes 3 warning signs investors should be aware of before investing in Powerwell Holdings Berhad. Read for free now. 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. To calculate this metric for Powerwell Holdings Berhad, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.25 = RM24m ÷ (RM183m - RM85m) (Based on the trailing twelve months to December 2024). So, Powerwell Holdings Berhad has an ROCE of 25%. That's a fantastic return and not only that, it outpaces the average of 11% earned by companies in a similar industry. See our latest analysis for Powerwell Holdings Berhad Historical performance is a great place to start when researching a stock so above you can see the gauge for Powerwell Holdings Berhad's ROCE against it's prior returns. If you'd like to look at how Powerwell Holdings Berhad has performed in the past in other metrics, you can view this free graph of Powerwell Holdings Berhad's past earnings, revenue and cash flow. Powerwell Holdings Berhad deserves to be commended in regards to it's returns. Over the past five years, ROCE has remained relatively flat at around 25% and the business has deployed 59% more capital into its operations. Returns like this are the envy of most businesses and given it has repeatedly reinvested at these rates, that's even better. You'll see this when looking at well operated businesses or favorable business models. On another note, while the change in ROCE trend might not scream for attention, it's interesting that the current liabilities have actually gone up over the last five years. This is intriguing because if current liabilities hadn't increased to 46% of total assets, this reported ROCE would probably be less than25% because total capital employed would be 25% ROCE could be even lower if current liabilities weren't 46% of total assets, because the the formula would show a larger base of total capital employed. Additionally, this high level of current liabilities isn't ideal because it means the company's suppliers (or short-term creditors) are effectively funding a large portion of the business. In summary, we're delighted to see that Powerwell Holdings Berhad has been compounding returns by reinvesting at consistently high rates of return, as these are common traits of a multi-bagger. And since the stock has risen strongly over the last five years, it appears the market might expect this trend to continue. So while the positive underlying trends may be accounted for by investors, we still think this stock is worth looking into further. One more thing: We've identified 3 warning signs with Powerwell Holdings Berhad (at least 1 which is concerning) , and understanding these would certainly be useful. 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.
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
18-04-2025
- Business
- Yahoo
Returns Are Gaining Momentum At Tien Wah Press Holdings Berhad (KLSE:TIENWAH)
If we want to find a stock that could multiply over the long term, what are the underlying trends we should look for? 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. So when we looked at Tien Wah Press Holdings Berhad (KLSE:TIENWAH) and its trend of ROCE, we really liked what we saw. Our free stock report includes 2 warning signs investors should be aware of before investing in Tien Wah Press Holdings Berhad. Read for free now. 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 Tien Wah Press Holdings Berhad is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.059 = RM24m ÷ (RM492m - RM84m) (Based on the trailing twelve months to December 2024). Therefore, Tien Wah Press Holdings Berhad has an ROCE of 5.9%. On its own that's a low return on capital but it's in line with the industry's average returns of 6.0%. Check out our latest analysis for Tien Wah Press Holdings Berhad Historical performance is a great place to start when researching a stock so above you can see the gauge for Tien Wah Press 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 Tien Wah Press Holdings Berhad. Tien Wah Press Holdings Berhad has broken into the black (profitability) and we're sure it's a sight for sore eyes. The company was generating losses five years ago, but has managed to turn it around and as we saw earlier is now earning 5.9%, which is always encouraging. Interestingly, the capital employed by the business has remained relatively flat, so these higher returns are either from prior investments paying off or increased efficiencies. That being said, while an increase in efficiency is no doubt appealing, it'd be helpful to know if the company does have any investment plans going forward. After all, a company can only become a long term multi-bagger if it continually reinvests in itself at high rates of return. To sum it up, Tien Wah Press Holdings Berhad is collecting higher returns from the same amount of capital, and that's impressive. Considering the stock has delivered 12% 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. Like most companies, Tien Wah Press Holdings Berhad does come with some risks, and we've found 2 warning signs that you should be aware of. While Tien Wah Press Holdings 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.
Yahoo
05-04-2025
- Business
- Yahoo
Some Investors May Be Worried About Master-Pack Group Berhad's (KLSE:MASTER) Returns On Capital
What trends should we look for it we want to identify stocks that can multiply in value over the long term? Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. In light of that, when we looked at Master-Pack Group Berhad (KLSE:MASTER) and its ROCE trend, we weren't exactly thrilled. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. 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. The formula for this calculation on Master-Pack Group Berhad is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.12 = RM23m ÷ (RM206m - RM24m) (Based on the trailing twelve months to December 2024). So, Master-Pack Group Berhad has an ROCE of 12%. On its own, that's a standard return, however it's much better than the 8.3% generated by the Packaging industry. Check out our latest analysis for Master-Pack 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 Master-Pack Group Berhad's past further, check out this free graph covering Master-Pack Group Berhad's past earnings, revenue and cash flow . In terms of Master-Pack Group Berhad's historical ROCE movements, the trend isn't fantastic. Over the last five years, returns on capital have decreased to 12% from 16% five years ago. However it looks like Master-Pack Group Berhad might be reinvesting for long term growth because while capital employed has increased, the company's sales haven't changed much in the last 12 months. It may take some time before the company starts to see any change in earnings from these investments. In summary, Master-Pack Group Berhad is reinvesting funds back into the business for growth but unfortunately it looks like sales haven't increased much just yet. Investors must think there's better things to come because the stock has knocked it out of the park, delivering a 171% gain to shareholders who have held over the last five years. But if the trajectory of these underlying trends continue, we think the likelihood of it being a multi-bagger from here isn't high. Like most companies, Master-Pack Group Berhad does come with some risks, and we've found 2 warning signs that you should be aware of. While Master-Pack 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. Sign in to access your portfolio
Yahoo
05-04-2025
- Automotive
- Yahoo
Solid Automotive Berhad's (KLSE:SOLID) Earnings Are Weaker Than They Seem
Despite posting some strong earnings, the market for Solid Automotive Berhad's (KLSE:SOLID) stock hasn't moved much. We did some digging, and we found some concerning factors in the details. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. In high finance, the key ratio used to measure how well a company converts reported profits into free cash flow (FCF) is the accrual ratio (from cashflow). In plain english, this ratio subtracts FCF from net profit, and divides that number by the company's average operating assets over that period. This ratio tells us how much of a company's profit is not backed by free cashflow. As a result, a negative accrual ratio is a positive for the company, and a positive accrual ratio is a negative. 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. Notably, there is some academic evidence that suggests that a high accrual ratio is a bad sign for near-term profits, generally speaking. For the year to January 2025, Solid Automotive Berhad had an accrual ratio of 0.32. Therefore, we know that it's free cashflow was significantly lower than its statutory profit, raising questions about how useful that profit figure really is. In the last twelve months it actually had negative free cash flow, with an outflow of RM24m despite its profit of RM39.3m, mentioned above. It's worth noting that Solid Automotive Berhad generated positive FCF of RM37m a year ago, so at least they've done it in the past. One positive for Solid Automotive Berhad shareholders is that it's accrual ratio was significantly better last year, providing reason to believe that it may return to stronger cash conversion in the future. Shareholders should look for improved cashflow relative to profit in the current year, if that is indeed the case. Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Solid Automotive Berhad . Solid Automotive Berhad didn't convert much of its profit to free cash flow in the last year, which some investors may consider rather suboptimal. Because of this, we think that it may be that Solid Automotive Berhad's statutory profits are better than its underlying earnings power. But on the bright side, its earnings per share have grown at an extremely impressive rate over the last three years. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. To that end, you should learn about the 3 warning signs we've spotted with Solid Automotive Berhad (including 1 which is significant) . This note has only looked at a single factor that sheds light on the nature of Solid Automotive Berhad's profit. But there are plenty of other ways to inform your opinion of a company. 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. Sign in to access your portfolio
