Latest news with #TMCLifeSciencesBerhad
Yahoo
04-05-2025
- Business
- Yahoo
Returns On Capital Signal Tricky Times Ahead For TMC Life Sciences Berhad (KLSE:TMCLIFE)
What trends should we look for it we want to identify stocks that can multiply in value over the long term? Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an expanding base of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. Having said that, from a first glance at TMC Life Sciences Berhad (KLSE:TMCLIFE) we aren't jumping out of our chairs at how returns are trending, but let's have a deeper 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 TMC Life Sciences Berhad, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.02 = RM21m ÷ (RM1.1b - RM107m) (Based on the trailing twelve months to December 2024). Therefore, TMC Life Sciences Berhad has an ROCE of 2.0%. In absolute terms, that's a low return and it also under-performs the Healthcare industry average of 9.9%. View our latest analysis for TMC Life Sciences 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 TMC Life Sciences Berhad. On the surface, the trend of ROCE at TMC Life Sciences Berhad doesn't inspire confidence. Around five years ago the returns on capital were 4.1%, but since then they've fallen to 2.0%. 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. To conclude, we've found that TMC Life Sciences Berhad is reinvesting in the business, but returns have been falling. And in the last five years, the stock has given away 12% so the market doesn't look too hopeful on these trends strengthening any time soon. Therefore based on the analysis done in this article, we don't think TMC Life Sciences Berhad has the makings of a multi-bagger. If you want to continue researching TMC Life Sciences Berhad, you might be interested to know about the 2 warning signs that our analysis has discovered. While TMC Life Sciences 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
17-04-2025
- Business
- Yahoo
Declining Stock and Decent Financials: Is The Market Wrong About TMC Life Sciences Berhad (KLSE:TMCLIFE)?
It is hard to get excited after looking at TMC Life Sciences Berhad's (KLSE:TMCLIFE) recent performance, when its stock has declined 18% over the past three months. However, the company's fundamentals look pretty decent, and long-term financials are usually aligned with future market price movements. Specifically, we decided to study TMC Life Sciences Berhad's ROE in this article. ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. 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 TMC Life Sciences Berhad. Read for free now. Return on equity can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for TMC Life Sciences Berhad is: 1.5% = RM13m ÷ RM851m (Based on the trailing twelve months to December 2024). The 'return' is the yearly profit. One way to conceptualize this is that for each MYR1 of shareholders' capital it has, the company made MYR0.02 in profit. See our latest analysis for TMC Life Sciences 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. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don't share these attributes. It is hard to argue that TMC Life Sciences Berhad's ROE is much good in and of itself. Not just that, even compared to the industry average of 10%, the company's ROE is entirely unremarkable. Although, we can see that TMC Life Sciences Berhad saw a modest net income growth of 17% over the past five years. Therefore, the growth in earnings could probably have been caused by other variables. For example, it is possible that the company's management has made some good strategic decisions, or that the company has a low payout ratio. Next, on comparing TMC Life Sciences Berhad's net income growth with the industry, we found that the company's reported growth is similar to the industry average growth rate of 19% over the last few years. The basis for attaching value to a company is, to a great extent, tied to its earnings growth. 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. What is TMCLIFE worth today? The intrinsic value infographic in our free research report helps visualize whether TMCLIFE is currently mispriced by the market. TMC Life Sciences Berhad has a low three-year median payout ratio of 15%, meaning that the company retains the remaining 85% of its profits. This suggests that the management is reinvesting most of the profits to grow the business. Moreover, TMC Life Sciences Berhad is determined to keep sharing its profits with shareholders which we infer from its long history of paying a dividend for at least ten years. In total, it does look like TMC Life Sciences Berhad has some positive aspects to its business. Even in spite of the low rate of return, the company has posted impressive earnings growth as a result of reinvesting heavily into its business. While we won't completely dismiss the company, what we would do, is try to ascertain how risky the business is to make a more informed decision around the company. You can see the 2 risks we have identified for TMC Life Sciences Berhad by visiting our risks dashboard for free on our platform 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
01-03-2025
- Business
- Yahoo
TMC Life Sciences Berhad (KLSE:TMCLIFE) investors are sitting on a loss of 36% if they invested a year ago
The simplest way to benefit from a rising market is to buy an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. Investors in TMC Life Sciences Berhad (KLSE:TMCLIFE) have tasted that bitter downside in the last year, as the share price dropped 39%. That falls noticeably short of the market return of around 5.0%. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 21% in three years. The falls have accelerated recently, with the share price down 11% in the last three months. We note that the company has reported results fairly recently; and the market is hardly delighted. You can check out the latest numbers in our company report. Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they've been consistent with returns. Check out our latest analysis for TMC Life Sciences Berhad To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time. Unfortunately TMC Life Sciences Berhad reported an EPS drop of 77% for the last year. The share price fall of 39% isn't as bad as the reduction in earnings per share. So the market may not be too worried about the EPS figure, at the moment -- or it may have expected earnings to drop faster. Indeed, with a P/E ratio of 60.42 there is obviously some real optimism that earnings will bounce back. You can see below how EPS has changed over time (discover the exact values by clicking on the image). This free interactive report on TMC Life Sciences Berhad's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further. As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, TMC Life Sciences Berhad's TSR for the last 1 year was -36%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments! TMC Life Sciences Berhad shareholders are down 36% for the year (even including dividends), but the market itself is up 5.0%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 3% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for TMC Life Sciences Berhad you should be aware of. For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the ticket. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Malaysian exchanges. 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
12-02-2025
- Business
- Yahoo
Estimating The Fair Value Of TMC Life Sciences Berhad (KLSE:TMCLIFE)
The projected fair value for TMC Life Sciences Berhad is RM0.50 based on Dividend Discount Model Current share price of RM0.47 suggests TMC Life Sciences Berhad is potentially trading close to its fair value When compared to theindustry average discount to fair value of 29%, TMC Life Sciences Berhad's competitors seem to be trading at a greater discount In this article we are going to estimate the intrinsic value of TMC Life Sciences Berhad (KLSE:TMCLIFE) by estimating the company's future cash flows and discounting them to their present value. The Discounted Cash Flow (DCF) model is the tool we will apply to do this. There's really not all that much to it, even though it might appear quite complex. Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. For those who are keen learners of equity analysis, the Simply Wall St analysis model here may be something of interest to you. See our latest analysis for TMC Life Sciences Berhad We have to calculate the value of TMC Life Sciences Berhad slightly differently to other stocks because it is a healthcare company. In this approach dividends per share (DPS) are used, as free cash flow is difficult to estimate and often not reported by analysts. Unless a company pays out the majority of its FCF as a dividend, this method will typically underestimate the value of the stock. We use the Gordon Growth Model, which assumes dividend will grow into perpetuity at a rate that can be sustained. The dividend is expected to grow at an annual growth rate equal to the 5-year average of the 10-year government bond yield of 3.6%. We then discount this figure to today's value at a cost of equity of 8.0%. Relative to the current share price of RM0.5, the company appears about fair value at a 5.4% discount to where the stock price trades currently. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out. Value Per Share = Expected Dividend Per Share / (Discount Rate - Perpetual Growth Rate) = RM0.02 / (8.0% – 3.6%) = RM0.5 We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual 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 TMC Life Sciences 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 8.0%, which is based on a levered beta of 0.800. 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. Strength Debt is well covered by earnings. Weakness Earnings declined over the past year. Dividend is low compared to the top 25% of dividend payers in the Healthcare market. Opportunity Current share price is below our estimate of fair value. Lack of analyst coverage makes it difficult to determine TMCLIFE's earnings prospects. Threat Debt is not well covered by operating cash flow. Paying a dividend but company has no free cash flows. Whilst important, the DCF calculation shouldn't be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. For TMC Life Sciences Berhad, we've compiled three additional elements you should consider: Risks: To that end, you should be aware of the 2 warning signs we've spotted with TMC Life Sciences Berhad . 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! Other Environmentally-Friendly Companies: Concerned about the environment and think consumers will buy eco-friendly products more and more? Browse through our interactive list of companies that are thinking about a greener future to discover some stocks you may not have thought of! PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the KLSE every day. If you want to find the calculation for other stocks 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
