If you want to identify your next multibagger, there are some important trends to look out for. First, you want to identify what is growing. return In addition to capital employed (ROCE) continues to increase base of capital employed. This basically means that the company has a profitable endeavor that can be continuously reinvested, which is the nature of compound interest. With that in mind, the trends we see are: Skelap Holdings Co., Ltd. (NZSE:SKL) looks very promising so let's take a look.
About Return on Capital Employed (ROCE)
For those who have never used ROCE before, it measures the “return” (pre-tax profit) that a company generates from the capital employed in its business. Analysts use the following formula to calculate ScalerUp Holdings's profit.
Return on Capital Employed = Earnings before interest and tax (EBIT) ÷ (Total assets – Current liabilities)
0.24 = NZ$70 million ÷ (NZ$331 million – NZ$36 million) (Based on the previous 12 months to December 2023).
therefore, Skelup Holdings' ROCE is 24%. That's an impressive return, and not only that, but it's higher than the average 14% earned by companies in similar industries.
Check out our latest analysis for Skelup Holdings.
In the chart above, we've measured Skellerup Holdings' previous ROCE against its previous performance, but the future is probably more important. Want to see what analysts are predicting for the future? Check out this free analyst report for Skellerup Holdings.
ROCE trends
Skelup Holdings is showing some positive trends. Data shows that return on equity has increased significantly to 24% over the past five years. The amount of capital used also increased by 35%. So we're very inspired by what we're seeing in Skelup Holdings, thanks to its ability to generate profits and reinvest capital.
What we can learn from Skellerup Holdings' ROCE
In summary, Skellerup Holdings has proven that it can reinvest in its business and generate higher returns on the capital employed. This is great. The impressive total return of 152% over the past five years shows that investors are expecting even better things to happen in the future. With that in mind, we think the stock is worth further consideration, as it could have a bright future ahead if Skelup Holdings can maintain these trends.
There is one more thing to note. two warning signs Partnering with and understanding Skellerup Holdings should be part of your investment process.
If you want to find more stocks with high returns, check this out. free This is a list of stocks with strong balance sheets and high return on equity.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodologies, and the articles are not intended as financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
