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Yahoo
17-02-2025
- Business
- Yahoo
Returns On Capital At CAM Resources Berhad (KLSE:CAMRES) Have Hit The Brakes
If we want to find a stock that could multiply over the long term, what are the underlying trends we should look for? Ideally, a business will show two trends; firstly a growing return on capital employed (ROCE) and secondly, an increasing amount 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. However, after investigating CAM Resources Berhad (KLSE:CAMRES), we don't think it's current trends fit the mold of a multi-bagger. 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 CAM Resources Berhad, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.049 = RM7.8m ÷ (RM189m - RM30m) (Based on the trailing twelve months to September 2024). Thus, CAM Resources Berhad has an ROCE of 4.9%. In absolute terms, that's a low return and it also under-performs the Consumer Durables industry average of 6.9%. Check out our latest analysis for CAM Resources 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 CAM Resources Berhad's past further, check out this free graph covering CAM Resources Berhad's past earnings, revenue and cash flow. Over the past five years, CAM Resources Berhad's ROCE and capital employed have both remained mostly flat. This tells us the company isn't reinvesting in itself, so it's plausible that it's past the growth phase. So unless we see a substantial change at CAM Resources Berhad in terms of ROCE and additional investments being made, we wouldn't hold our breath on it being a multi-bagger. In a nutshell, CAM Resources Berhad has been trudging along with the same returns from the same amount of capital over the last five years. And with the stock having returned a mere 23% in the last five years to shareholders, you could argue that they're aware of these lackluster trends. As a result, if you're hunting for a multi-bagger, we think you'd have more luck elsewhere. If you'd like to know more about CAM Resources Berhad, we've spotted 4 warning signs, and 1 of them can't be ignored. While CAM Resources 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
11-02-2025
- Business
- Yahoo
Returns Are Gaining Momentum At Cepatwawasan Group Berhad (KLSE:CEPAT)
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. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. So on that note, Cepatwawasan Group Berhad (KLSE:CEPAT) looks quite promising in regards to its trends of return on capital. 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 Cepatwawasan Group Berhad is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.066 = RM30m ÷ (RM490m - RM39m) (Based on the trailing twelve months to September 2024). So, Cepatwawasan Group Berhad has an ROCE of 6.6%. In absolute terms, that's a low return but it's around the Food industry average of 8.2%. Check out our latest analysis for Cepatwawasan Group Berhad Historical performance is a great place to start when researching a stock so above you can see the gauge for Cepatwawasan Group Berhad's ROCE against it's prior returns. If you'd like to look at how Cepatwawasan Group Berhad has performed in the past in other metrics, you can view this free graph of Cepatwawasan Group Berhad's past earnings, revenue and cash flow. Cepatwawasan Group Berhad's ROCE growth is quite impressive. More specifically, while the company has kept capital employed relatively flat over the last five years, the ROCE has climbed 888% in that same time. Basically the business is generating higher returns from the same amount of capital and that is proof that there are improvements in the company's efficiencies. On that front, things are looking good so it's worth exploring what management has said about growth plans going forward. To bring it all together, Cepatwawasan Group Berhad has done well to increase the returns it's generating from its capital employed. Since the stock has returned a solid 50% to shareholders over the last five years, it's fair to say investors are beginning to recognize these changes. So given the stock has proven it has promising trends, it's worth researching the company further to see if these trends are likely to persist. If you'd like to know about the risks facing Cepatwawasan Group Berhad, we've discovered 2 warning signs that you should be aware of. While Cepatwawasan 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.
Yahoo
28-01-2025
- Business
- Yahoo
Returns On Capital At Cloudpoint Technology Berhad (KLSE:CLOUDPT) Paint A Concerning Picture
If we want to find a stock that could multiply over the long term, what are the underlying trends we should look 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. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. Looking at Cloudpoint Technology Berhad (KLSE:CLOUDPT), it does have a high ROCE right now, but lets see how returns are trending. 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 Cloudpoint Technology Berhad, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.29 = RM23m ÷ (RM109m - RM30m) (Based on the trailing twelve months to September 2024). Thus, Cloudpoint Technology Berhad has an ROCE of 29%. That's a fantastic return and not only that, it outpaces the average of 9.5% earned by companies in a similar industry. Check out our latest analysis for Cloudpoint Technology Berhad In the above chart we have measured Cloudpoint Technology 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 Cloudpoint Technology Berhad for free. On the surface, the trend of ROCE at Cloudpoint Technology Berhad doesn't inspire confidence. Historically returns on capital were even higher at 47%, but they have dropped over the last four years. 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. On a side note, Cloudpoint Technology Berhad has done well to pay down its current liabilities to 28% 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. Bringing it all together, while we're somewhat encouraged by Cloudpoint Technology Berhad's reinvestment in its own business, we're aware that returns are shrinking. Since the stock has gained an impressive 76% over the last year, investors must think there's better things to come. However, unless these underlying trends turn more positive, we wouldn't get our hopes up too high. If you'd like to know more about Cloudpoint Technology Berhad, we've spotted 2 warning signs, and 1 of them is a bit unpleasant. If you'd like to see other companies earning high returns, check out our free list of companies earning high returns with solid balance sheets 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
28-01-2025
- Business
- Yahoo
Returns On Capital At Cloudpoint Technology Berhad (KLSE:CLOUDPT) Paint A Concerning Picture
If we want to find a stock that could multiply over the long term, what are the underlying trends we should look 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. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. Looking at Cloudpoint Technology Berhad (KLSE:CLOUDPT), it does have a high ROCE right now, but lets see how returns are trending. 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 Cloudpoint Technology Berhad, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.29 = RM23m ÷ (RM109m - RM30m) (Based on the trailing twelve months to September 2024). Thus, Cloudpoint Technology Berhad has an ROCE of 29%. That's a fantastic return and not only that, it outpaces the average of 9.5% earned by companies in a similar industry. Check out our latest analysis for Cloudpoint Technology Berhad In the above chart we have measured Cloudpoint Technology 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 Cloudpoint Technology Berhad for free. On the surface, the trend of ROCE at Cloudpoint Technology Berhad doesn't inspire confidence. Historically returns on capital were even higher at 47%, but they have dropped over the last four years. 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. On a side note, Cloudpoint Technology Berhad has done well to pay down its current liabilities to 28% 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. Bringing it all together, while we're somewhat encouraged by Cloudpoint Technology Berhad's reinvestment in its own business, we're aware that returns are shrinking. Since the stock has gained an impressive 76% over the last year, investors must think there's better things to come. However, unless these underlying trends turn more positive, we wouldn't get our hopes up too high. If you'd like to know more about Cloudpoint Technology Berhad, we've spotted 2 warning signs, and 1 of them is a bit unpleasant. If you'd like to see other companies earning high returns, check out our free list of companies earning high returns with solid balance sheets 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
