Latest news with #businessdecline
Yahoo
23-05-2025
- Business
- Yahoo
Rohas Tecnic Berhad's (KLSE:ROHAS) Returns On Capital Not Reflecting Well On The Business
What underlying fundamental trends can indicate that a company might be in decline? When we see a declining return on capital employed (ROCE) in conjunction with a declining base of capital employed, that's often how a mature business shows signs of aging. Trends like this ultimately mean the business is reducing its investments and also earning less on what it has invested. In light of that, from a first glance at Rohas Tecnic Berhad (KLSE:ROHAS), we've spotted some signs that it could be struggling, so let's investigate. 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. 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 Rohas Tecnic Berhad, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.0034 = RM1.4m ÷ (RM631m - RM210m) (Based on the trailing twelve months to December 2024). Thus, Rohas Tecnic Berhad has an ROCE of 0.3%. Ultimately, that's a low return and it under-performs the Construction industry average of 8.2%. View our latest analysis for Rohas Tecnic Berhad Historical performance is a great place to start when researching a stock so above you can see the gauge for Rohas Tecnic Berhad's ROCE against it's prior returns. If you'd like to look at how Rohas Tecnic Berhad has performed in the past in other metrics, you can view this free graph of Rohas Tecnic Berhad's past earnings, revenue and cash flow. We are a bit worried about the trend of returns on capital at Rohas Tecnic Berhad. To be more specific, the ROCE was 8.6% five years ago, but since then it has dropped noticeably. Meanwhile, capital employed in the business has stayed roughly the flat over the period. Companies that exhibit these attributes tend to not be shrinking, but they can be mature and facing pressure on their margins from competition. If these trends continue, we wouldn't expect Rohas Tecnic Berhad to turn into a multi-bagger. In the end, the trend of lower returns on the same amount of capital isn't typically an indication that we're looking at a growth stock. It should come as no surprise then that the stock has fallen 39% over the last five years, so it looks like investors are recognizing these changes. That being the case, unless the underlying trends revert to a more positive trajectory, we'd consider looking elsewhere. If you'd like to know more about Rohas Tecnic Berhad, we've spotted 2 warning signs, and 1 of them is a bit unpleasant. 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
23-05-2025
- Business
- Yahoo
Rohas Tecnic Berhad's (KLSE:ROHAS) Returns On Capital Not Reflecting Well On The Business
What underlying fundamental trends can indicate that a company might be in decline? When we see a declining return on capital employed (ROCE) in conjunction with a declining base of capital employed, that's often how a mature business shows signs of aging. Trends like this ultimately mean the business is reducing its investments and also earning less on what it has invested. In light of that, from a first glance at Rohas Tecnic Berhad (KLSE:ROHAS), we've spotted some signs that it could be struggling, so let's investigate. 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. 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 Rohas Tecnic Berhad, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.0034 = RM1.4m ÷ (RM631m - RM210m) (Based on the trailing twelve months to December 2024). Thus, Rohas Tecnic Berhad has an ROCE of 0.3%. Ultimately, that's a low return and it under-performs the Construction industry average of 8.2%. View our latest analysis for Rohas Tecnic Berhad Historical performance is a great place to start when researching a stock so above you can see the gauge for Rohas Tecnic Berhad's ROCE against it's prior returns. If you'd like to look at how Rohas Tecnic Berhad has performed in the past in other metrics, you can view this free graph of Rohas Tecnic Berhad's past earnings, revenue and cash flow. We are a bit worried about the trend of returns on capital at Rohas Tecnic Berhad. To be more specific, the ROCE was 8.6% five years ago, but since then it has dropped noticeably. Meanwhile, capital employed in the business has stayed roughly the flat over the period. Companies that exhibit these attributes tend to not be shrinking, but they can be mature and facing pressure on their margins from competition. If these trends continue, we wouldn't expect Rohas Tecnic Berhad to turn into a multi-bagger. In the end, the trend of lower returns on the same amount of capital isn't typically an indication that we're looking at a growth stock. It should come as no surprise then that the stock has fallen 39% over the last five years, so it looks like investors are recognizing these changes. That being the case, unless the underlying trends revert to a more positive trajectory, we'd consider looking elsewhere. If you'd like to know more about Rohas Tecnic Berhad, we've spotted 2 warning signs, and 1 of them is a bit unpleasant. 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
18-05-2025
- Business
- Yahoo
Speedy Hire (LON:SDY) May Have Issues Allocating Its Capital
What underlying fundamental trends can indicate that a company might be in decline? Typically, we'll see the trend of both return on capital employed (ROCE) declining and this usually coincides with a decreasing amount of capital employed. This indicates to us that the business is not only shrinking the size of its net assets, but its returns are falling as well. So after glancing at the trends within Speedy Hire (LON:SDY), we weren't too hopeful. Our free stock report includes 2 warning signs investors should be aware of before investing in Speedy Hire. Read for free now. For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. To calculate this metric for Speedy Hire, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.058 = UK£21m ÷ (UK£505m - UK£137m) (Based on the trailing twelve months to September 2024). Therefore, Speedy Hire has an ROCE of 5.8%. Ultimately, that's a low return and it under-performs the Trade Distributors industry average of 14%. Check out our latest analysis for Speedy Hire In the above chart we have measured Speedy Hire'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 Speedy Hire for free. There is reason to be cautious about Speedy Hire, given the returns are trending downwards. About five years ago, returns on capital were 10%, however they're now substantially lower than that as we saw above. Meanwhile, capital employed in the business has stayed roughly the flat over the period. Companies that exhibit these attributes tend to not be shrinking, but they can be mature and facing pressure on their margins from competition. If these trends continue, we wouldn't expect Speedy Hire to turn into a multi-bagger. In summary, it's unfortunate that Speedy Hire is generating lower returns from the same amount of capital. Investors haven't taken kindly to these developments, since the stock has declined 46% from where it was five years ago. With underlying trends that aren't great in these areas, we'd consider looking elsewhere. If you want to know some of the risks facing Speedy Hire we've found 2 warning signs (1 is concerning!) that you should be aware of before investing here. While Speedy Hire 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. 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
08-05-2025
- Business
- Yahoo
Samuel Heath & Sons (LON:HSM) Will Be Hoping To Turn Its Returns On Capital Around
If we're looking to avoid a business that is in decline, what are the trends that can warn us ahead of time? When we see a declining return on capital employed (ROCE) in conjunction with a declining base of capital employed, that's often how a mature business shows signs of aging. This reveals that the company isn't compounding shareholder wealth because returns are falling and its net asset base is shrinking. In light of that, from a first glance at Samuel Heath & Sons (LON:HSM), we've spotted some signs that it could be struggling, so let's investigate. Our free stock report includes 2 warning signs investors should be aware of before investing in Samuel Heath & Sons. Read for free now. Return On Capital Employed (ROCE): What Is It? 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 Samuel Heath & Sons, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.063 = UK£843k ÷ (UK£15m - UK£1.6m) (Based on the trailing twelve months to September 2024). Therefore, Samuel Heath & Sons has an ROCE of 6.3%. Ultimately, that's a low return and it under-performs the Building industry average of 13%. Check out our latest analysis for Samuel Heath & Sons AIM:HSM Return on Capital Employed May 8th 2025 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 Samuel Heath & Sons has performed in the past in other metrics, you can view this free graph of Samuel Heath & Sons' past earnings, revenue and cash flow. How Are Returns Trending? We are a bit worried about the trend of returns on capital at Samuel Heath & Sons. Unfortunately the returns on capital have diminished from the 10% that they were earning five years ago. On top of that, it's worth noting that the amount of capital employed within the business has remained relatively steady. Since returns are falling and the business has the same amount of assets employed, this can suggest it's a mature business that hasn't had much growth in the last five years. So because these trends aren't typically conducive to creating a multi-bagger, we wouldn't hold our breath on Samuel Heath & Sons becoming one if things continue as they have. Our Take On Samuel Heath & Sons' ROCE In the end, the trend of lower returns on the same amount of capital isn't typically an indication that we're looking at a growth stock. Yet despite these concerning fundamentals, the stock has performed strongly with a 43% return over the last five years, so investors appear very optimistic. Regardless, we don't feel too comfortable with the fundamentals so we'd be steering clear of this stock for now.
