Latest news with #RM6.9m
Yahoo
14-04-2025
- Business
- Yahoo
Some Investors May Be Worried About Orgabio Holdings Berhad's (KLSE:ORGABIO) Returns On Capital
If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. 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. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. However, after briefly looking over the numbers, we don't think Orgabio Holdings Berhad (KLSE:ORGABIO) has the makings of a multi-bagger going forward, but let's have a look at why that may be. We've discovered 2 warning signs about Orgabio Holdings Berhad. View them for free. 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 Orgabio Holdings Berhad, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.10 = RM6.9m ÷ (RM89m - RM22m) (Based on the trailing twelve months to December 2024). Therefore, Orgabio Holdings Berhad has an ROCE of 10%. By itself that's a normal return on capital and it's in line with the industry's average returns of 9.7%. Check out our latest analysis for Orgabio Holdings 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'd like to look at how Orgabio Holdings Berhad has performed in the past in other metrics, you can view this free graph of Orgabio Holdings Berhad's past earnings, revenue and cash flow. In terms of Orgabio Holdings Berhad's historical ROCE movements, the trend isn't fantastic. Around five years ago the returns on capital were 23%, but since then they've fallen to 10%. 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. Even though returns on capital have fallen in the short term, we find it promising that revenue and capital employed have both increased for Orgabio Holdings Berhad. These trends don't appear to have influenced returns though, because the total return from the stock has been mostly flat over the last year. So we think it'd be worthwhile to look further into this stock given the trends look encouraging. One final note, you should learn about the 2 warning signs we've spotted with Orgabio Holdings Berhad (including 1 which shouldn't be ignored) . 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
20-02-2025
- Business
- Yahoo
Returns On Capital Are Showing Encouraging Signs At Bright Packaging Industry Berhad (KLSE:BRIGHT)
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. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. So on that note, Bright Packaging Industry Berhad (KLSE:BRIGHT) looks quite promising in regards to its trends of return on capital. 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. Analysts use this formula to calculate it for Bright Packaging Industry Berhad: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.019 = RM2.4m ÷ (RM134m - RM6.9m) (Based on the trailing twelve months to November 2024). Therefore, Bright Packaging Industry Berhad has an ROCE of 1.9%. In absolute terms, that's a low return and it also under-performs the Packaging industry average of 8.9%. See our latest analysis for Bright Packaging Industry Berhad Historical performance is a great place to start when researching a stock so above you can see the gauge for Bright Packaging Industry 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 Bright Packaging Industry Berhad. While the ROCE isn't as high as some other companies out there, it's great to see it's on the up. The figures show that over the last five years, ROCE has grown 124% whilst employing roughly the same amount of capital. So our take on this is that the business has increased efficiencies to generate these higher returns, all the while not needing to make any additional investments. It's worth looking deeper into this though because while it's great that the business is more efficient, it might also mean that going forward the areas to invest internally for the organic growth are lacking. To bring it all together, Bright Packaging Industry Berhad has done well to increase the returns it's generating from its capital employed. And since the stock has fallen 23% over the last five years, there might be an opportunity here. That being the case, research into the company's current valuation metrics and future prospects seems fitting. Bright Packaging Industry Berhad does have some risks, we noticed 2 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about. 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
