Latest news with #VersatileCreativeBerhad
Yahoo
01-05-2025
- Business
- Yahoo
Returns Are Gaining Momentum At Versatile Creative Berhad (KLSE:VERSATL)
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. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. So when we looked at Versatile Creative Berhad (KLSE:VERSATL) and its trend of ROCE, we really liked what we saw. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. 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 Versatile Creative Berhad, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.075 = RM8.1m ÷ (RM179m - RM70m) (Based on the trailing twelve months to December 2024). Thus, Versatile Creative Berhad has an ROCE of 7.5%. On its own, that's a low figure but it's around the 8.3% average generated by the Packaging industry. View our latest analysis for Versatile Creative Berhad Historical performance is a great place to start when researching a stock so above you can see the gauge for Versatile Creative Berhad's ROCE against it's prior returns. If you're interested in investigating Versatile Creative Berhad's past further, check out this free graph covering Versatile Creative Berhad's past earnings, revenue and cash flow. The fact that Versatile Creative Berhad is now generating some pre-tax profits from its prior investments is very encouraging. About five years ago the company was generating losses but things have turned around because it's now earning 7.5% on its capital. In addition to that, Versatile Creative Berhad is employing 116% more capital than previously which is expected of a company that's trying to break into profitability. This can tell us that the company has plenty of reinvestment opportunities that are able to generate higher returns. In summary, it's great to see that Versatile Creative Berhad has managed to break into profitability and is continuing to reinvest in its business. Since the stock has returned a staggering 189% to shareholders over the last five years, it looks like investors are recognizing these changes. With that being said, we still think the promising fundamentals mean the company deserves some further due diligence. On a final note, we've found 1 warning sign for Versatile Creative Berhad that we think you should be aware of. 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. Sign in to access your portfolio
Yahoo
03-04-2025
- Business
- Yahoo
Versatile Creative Berhad's (KLSE:VERSATL) Stock Been Rising: Are Strong Financials Guiding The Market?
Versatile Creative Berhad's (KLSE:VERSATL) stock up by 3.7% over the past month. Given that the market rewards strong financials in the long-term, we wonder if that is the case in this instance. Specifically, we decided to study Versatile Creative Berhad's ROE in this article. Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. In simpler terms, it measures the profitability of a company in relation to shareholder's equity. 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. ROE 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 Versatile Creative Berhad is: 12% = RM11m ÷ RM90m (Based on the trailing twelve months to December 2024). The 'return' is the income the business earned over the last year. Another way to think of that is that for every MYR1 worth of equity, the company was able to earn MYR0.12 in profit. Check out our latest analysis for Versatile Creative Berhad Thus far, we have learned that ROE measures how efficiently a company is generating its profits. 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. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features. To start with, Versatile Creative Berhad's ROE looks acceptable. On comparing with the average industry ROE of 7.7% the company's ROE looks pretty remarkable. Probably as a result of this, Versatile Creative Berhad was able to see an impressive net income growth of 72% over the last five years. However, there could also be other causes behind this growth. Such as - high earnings retention or an efficient management in place. As a next step, we compared Versatile Creative Berhad's net income growth with the industry, and pleasingly, we found that the growth seen by the company is higher than the average industry growth of 7.8%. Earnings growth is a huge factor in stock valuation. 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. Is Versatile Creative Berhad fairly valued compared to other companies? These 3 valuation measures might help you decide. Versatile Creative Berhad doesn't pay any regular dividends to its shareholders, meaning that the company has been reinvesting all of its profits into the business. This is likely what's driving the high earnings growth number discussed above. In total, we are pretty happy with Versatile Creative Berhad's performance. Specifically, we like that the company is reinvesting a huge chunk of its profits at a high rate of return. This of course has caused the company to see substantial growth in its earnings. If the company continues to grow its earnings the way it has, that could have a positive impact on its share price given how earnings per share influence long-term share prices. Let's not forget, business risk is also one of the factors that affects the price of the stock. So this is also an important area that investors need to pay attention to before making a decision on any business. Our risks dashboard will have the 1 risk we have identified for Versatile Creative Berhad. 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
07-03-2025
- Business
- Yahoo
We Think Versatile Creative Berhad's (KLSE:VERSATL) Robust Earnings Are Conservative
The subdued stock price reaction suggests that Versatile Creative Berhad's (KLSE:VERSATL) strong earnings didn't offer any surprises. Investors are probably missing some underlying factors which are encouraging for the future of the company. View our latest analysis for Versatile Creative Berhad One key financial ratio used to measure how well a company converts its profit to free cash flow (FCF) is the accrual ratio. In plain english, this ratio subtracts FCF from net profit, and divides that number by the company's average operating assets over that period. The ratio shows us how much a company's profit exceeds its FCF. Therefore, it's actually considered a good thing when a company has a negative accrual ratio, but a bad thing if its accrual ratio is positive. That is not intended to imply we should worry about a positive accrual ratio, but it's worth noting where the accrual ratio is rather high. That's because some academic studies have suggested that high accruals ratios tend to lead to lower profit or less profit growth. Over the twelve months to December 2024, Versatile Creative Berhad recorded an accrual ratio of -0.33. That implies it has very good cash conversion, and that its earnings in the last year actually significantly understate its free cash flow. To wit, it produced free cash flow of RM27m during the period, dwarfing its reported profit of RM6.40m. Versatile Creative Berhad shareholders are no doubt pleased that free cash flow improved over the last twelve months. Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Versatile Creative Berhad. As we discussed above, Versatile Creative Berhad's accrual ratio indicates strong conversion of profit to free cash flow, which is a positive for the company. Based on this observation, we consider it possible that Versatile Creative Berhad's statutory profit actually understates its earnings potential! And on top of that, its earnings per share have grown at an extremely impressive rate over the last year. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. In terms of investment risks, we've identified 1 warning sign with Versatile Creative Berhad, and understanding this should be part of your investment process. This note has only looked at a single factor that sheds light on the nature of Versatile Creative 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
Yahoo
03-03-2025
- Business
- Yahoo
If EPS Growth Is Important To You, Versatile Creative Berhad (KLSE:VERSATL) Presents An Opportunity
The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up. In contrast to all that, many investors prefer to focus on companies like Versatile Creative Berhad (KLSE:VERSATL), which has not only revenues, but also profits. While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it. View our latest analysis for Versatile Creative Berhad If you believe that markets are even vaguely efficient, then over the long term you'd expect a company's share price to follow its earnings per share (EPS) outcomes. That means EPS growth is considered a real positive by most successful long-term investors. Versatile Creative Berhad's shareholders have have plenty to be happy about as their annual EPS growth for the last 3 years was 54%. That sort of growth rarely ever lasts long, but it is well worth paying attention to when it happens. One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. Versatile Creative Berhad shareholders can take confidence from the fact that EBIT margins are up from -0.3% to 2.3%, and revenue is growing. That's great to see, on both counts. The chart below shows how the company's bottom and top lines have progressed over time. To see the actual numbers, click on the chart. Since Versatile Creative Berhad is no giant, with a market capitalisation of RM195m, you should definitely check its cash and debt before getting too excited about its prospects. Seeing insiders owning a large portion of the shares on issue is often a good sign. Their incentives will be aligned with the investors and there's less of a probability in a sudden sell-off that would impact the share price. So we're pleased to report that Versatile Creative Berhad insiders own a meaningful share of the business. Actually, with 37% of the company to their names, insiders are profoundly invested in the business. Shareholders and speculators should be reassured by this kind of alignment, as it suggests the business will be run for the benefit of shareholders. To give you an idea, the value of insiders' holdings in the business are valued at RM73m at the current share price. So there's plenty there to keep them focused! Versatile Creative Berhad's earnings per share have been soaring, with growth rates sky high. That sort of growth is nothing short of eye-catching, and the large investment held by insiders should certainly brighten the view of the company. At times fast EPS growth is a sign the business has reached an inflection point, so there's a potential opportunity to be had here. Based on the sum of its parts, we definitely think its worth watching Versatile Creative Berhad very closely. It is worth noting though that we have found 1 warning sign for Versatile Creative Berhad that you need to take into consideration. While opting for stocks without growing earnings and absent insider buying can yield results, for investors valuing these key metrics, here is a carefully selected list of companies in MY with promising growth potential and insider confidence. Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction. 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
