Latest news with #SwiftHaulageBerhad
Yahoo
23-05-2025
- Business
- Yahoo
Swift Haulage Berhad (KLSE:SWIFT) Could Be Struggling To Allocate Capital
If you're looking for a multi-bagger, there's a few things to keep an eye out for. 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. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. Having said that, from a first glance at Swift Haulage Berhad (KLSE:SWIFT) we aren't jumping out of our chairs at how returns are trending, but let's have a deeper look. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. 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 Swift Haulage Berhad: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.053 = RM75m ÷ (RM1.7b - RM305m) (Based on the trailing twelve months to March 2025). Thus, Swift Haulage Berhad has an ROCE of 5.3%. On its own that's a low return on capital but it's in line with the industry's average returns of 5.3%. Check out our latest analysis for Swift Haulage Berhad Above you can see how the current ROCE for Swift Haulage Berhad compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like, you can check out the forecasts from the analysts covering Swift Haulage Berhad for free. On the surface, the trend of ROCE at Swift Haulage Berhad doesn't inspire confidence. To be more specific, ROCE has fallen from 9.6% over the last five years. On the other hand, the company has been employing more capital without a corresponding improvement in sales in the last year, which could suggest these investments are longer term plays. 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 related note, Swift Haulage Berhad has decreased its current liabilities to 18% 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. 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. Bringing it all together, while we're somewhat encouraged by Swift Haulage Berhad's reinvestment in its own business, we're aware that returns are shrinking. Since the stock has declined 41% over the last three years, investors may not be too optimistic on this trend improving either. In any case, the stock doesn't have these traits of a multi-bagger discussed above, so if that's what you're looking for, we think you'd have more luck elsewhere. If you'd like to know more about Swift Haulage Berhad, we've spotted 4 warning signs, and 1 of them doesn't sit too well with us. 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
22-05-2025
- Business
- Yahoo
Swift Haulage Berhad (KLSE:SWIFT) Could Be Struggling To Allocate Capital
If you're looking for a multi-bagger, there's a few things to keep an eye out for. 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. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. Having said that, from a first glance at Swift Haulage Berhad (KLSE:SWIFT) we aren't jumping out of our chairs at how returns are trending, but let's have a deeper look. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. 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 Swift Haulage Berhad: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.053 = RM75m ÷ (RM1.7b - RM305m) (Based on the trailing twelve months to March 2025). Thus, Swift Haulage Berhad has an ROCE of 5.3%. On its own that's a low return on capital but it's in line with the industry's average returns of 5.3%. Check out our latest analysis for Swift Haulage Berhad Above you can see how the current ROCE for Swift Haulage Berhad compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like, you can check out the forecasts from the analysts covering Swift Haulage Berhad for free. On the surface, the trend of ROCE at Swift Haulage Berhad doesn't inspire confidence. To be more specific, ROCE has fallen from 9.6% over the last five years. On the other hand, the company has been employing more capital without a corresponding improvement in sales in the last year, which could suggest these investments are longer term plays. 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 related note, Swift Haulage Berhad has decreased its current liabilities to 18% 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. 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. Bringing it all together, while we're somewhat encouraged by Swift Haulage Berhad's reinvestment in its own business, we're aware that returns are shrinking. Since the stock has declined 41% over the last three years, investors may not be too optimistic on this trend improving either. In any case, the stock doesn't have these traits of a multi-bagger discussed above, so if that's what you're looking for, we think you'd have more luck elsewhere. If you'd like to know more about Swift Haulage Berhad, we've spotted 4 warning signs, and 1 of them doesn't sit too well with us. 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. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
12-04-2025
- Business
- Yahoo
Estimating The Fair Value Of Swift Haulage Berhad (KLSE:SWIFT)
The projected fair value for Swift Haulage Berhad is RM0.43 based on 2 Stage Free Cash Flow to Equity Swift Haulage Berhad's RM0.39 share price indicates it is trading at similar levels as its fair value estimate The RM0.45 analyst price target for SWIFT is 5.2% more than our estimate of fair value How far off is Swift Haulage Berhad (KLSE:SWIFT) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced by taking the forecast future cash flows of the company and discounting them back to today's value. The Discounted Cash Flow (DCF) model is the tool we will apply to do this. Before you think you won't be able to understand it, just read on! It's actually much less complex than you'd imagine. Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. For those who are keen learners of equity analysis, the Simply Wall St analysis model here may be something of interest to you. 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. We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (MYR, Millions) RM97.5m RM99.4m RM65.1m RM48.3m RM40.1m RM35.8m RM33.5m RM32.3m RM31.9m RM31.9m Growth Rate Estimate Source Analyst x2 Analyst x2 Analyst x1 Est @ -25.79% Est @ -16.97% Est @ -10.80% Est @ -6.48% Est @ -3.46% Est @ -1.34% Est @ 0.14% Present Value (MYR, Millions) Discounted @ 15% RM84.7 RM75.0 RM42.7 RM27.5 RM19.9 RM15.4 RM12.5 RM10.5 RM9.0 RM7.8 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = RM305m The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 3.6%. We discount the terminal cash flows to today's value at a cost of equity of 15%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = RM32m× (1 + 3.6%) ÷ (15%– 3.6%) = RM288m Present Value of Terminal Value (PVTV)= TV / (1 + r)10= RM288m÷ ( 1 + 15%)10= RM70m The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is RM376m. In the final step we divide the equity value by the number of shares outstanding. Compared to the current share price of RM0.4, the company appears about fair value at a 10% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind. The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Swift Haulage Berhad as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 15%, which is based on a levered beta of 1.939. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. See our latest analysis for Swift Haulage Berhad Strength No major strengths identified for SWIFT. Weakness Earnings declined over the past year. Interest payments on debt are not well covered. Dividend is low compared to the top 25% of dividend payers in the Logistics market. Opportunity Annual earnings are forecast to grow for the next 3 years. Good value based on P/E ratio and estimated fair value. Threat Debt is not well covered by operating cash flow. Paying a dividend but company has no free cash flows. Annual earnings are forecast to grow slower than the Malaysian market. Valuation is only one side of the coin in terms of building your investment thesis, and it ideally won't be the sole piece of analysis you scrutinize for a company. It's not possible to obtain a foolproof valuation with a DCF model. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. For Swift Haulage Berhad, there are three essential items you should further examine: Risks: As an example, we've found 4 warning signs for Swift Haulage Berhad (1 is significant!) that you need to consider before investing here. Future Earnings: How does SWIFT's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart . Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! PS. Simply Wall St updates its DCF calculation for every Malaysian stock every day, so if you want to find the intrinsic value of any other stock just search 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
