If you're not sure where to start when looking for the next multi-bagger, there are a few key trends you should keep an eye out for. Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. Having said that, while the ROCE is currently high for COFCO Joycome Foods (HKG:1610), we aren't jumping out of our chairs because returns are decreasing.
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 COFCO Joycome Foods, this is the formula:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.23 = CN¥2.2b ÷ (CN¥18b - CN¥8.5b) (Based on the trailing twelve months to December 2021).
So, COFCO Joycome Foods has an ROCE of 23%. That's a fantastic return and not only that, it outpaces the average of 9.4% earned by companies in a similar industry.
Check out our latest analysis for COFCO Joycome Foods
SEHK:1610 Return on Capital Employed August 16th 2022
In the above chart we have measured COFCO Joycome Foods' prior ROCE against its prior performance, but the future is arguably more important. If you'd like to see what analysts are forecasting going forward, you should check out our free report for COFCO Joycome Foods.
What Does the ROCE Trend For COFCO Joycome Foods Tell Us?
On the surface, the trend of ROCE at COFCO Joycome Foods doesn't inspire confidence. While it's comforting that the ROCE is high, five years ago it was 33%. Given the business is employing more capital while revenue has slipped, this is a bit concerning. If this were to continue, you might be looking at a company that is trying to reinvest for growth but is actually losing market share since sales haven't increased.
On a side note, COFCO Joycome Foods' current liabilities have increased over the last five years to 47% of total assets, effectively distorting the ROCE to some degree. If current liabilities hadn't increased as much as they did, the ROCE could actually be even lower. And with current liabilities at these levels, suppliers or short-term creditors are effectively funding a large part of the business, which can introduce some risks.
The Key Takeaway
From the above analysis, we find it rather worrisome that returns on capital and sales for COFCO Joycome Foods have fallen, meanwhile the business is employing more capital than it was five years ago. Yet despite these poor fundamentals, the stock has gained a huge 125% over the last five years, so investors appear very optimistic. In any case, the current underlying trends don't bode well for long term performance so unless they reverse, we'd start looking elsewhere.
On a separate note, we've found 2 warning signs for COFCO Joycome Foods you'll probably want to know about.
If you want to search for more stocks that have been earning high returns, check out this free list of stocks with solid balance sheets that are also earning high returns on equity.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This 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.
如果你不确定在寻找下一个多袋子时从哪里开始,有几个关键的趋势你应该密切关注。首先,我们想要确定一个不断增长的退货在已使用资本(ROCE)上,然后在此基础上,不断增加基地已动用资本的比例。这向我们表明,它是一台复合机器,能够不断地将其收益再投资于企业,并产生更高的回报。话虽如此,尽管ROCE目前处于较高水平中粮卓康食品(HKG:1610),我们不会因为回报下降而从椅子上跳起来。
资本回报率(ROCE):它是什么?
如果您不确定,只需澄清一下,ROCE是一种评估公司投资于其业务的资本获得多少税前收入(按百分比计算)的指标。要计算中粮卓康食品的这一指标,公式如下:
已动用资本回报率=息税前收益(EBIT)?(总资产-流动负债)
0.23=CN元22亿?(CN元180亿-CN元85亿)(根据截至2021年12月的往绩12个月计算).
所以,中粮卓康食品的净资产收益率为23%。这是一个惊人的回报,不仅如此,它还超过了类似行业公司9.4%的平均回报率。
查看我们对中粮卓康食品的最新分析
联交所:1610已动用资本回报率2022年8月16日
在上面的图表中,我们衡量了中粮卓康食品之前的净资产收益率与其之前的表现,但可以说,未来更重要。如果您想查看分析师对未来的预测,您应该查看我们的免费中粮卓康食品的报告。
中粮卓康食品的ROCE趋势告诉我们什么?
从表面上看,中粮卓康食品的ROCE趋势并没有激发人们的信心。虽然令人欣慰的是,ROCE很高,但五年前是33%。考虑到该公司在收入下滑的情况下雇佣了更多的资本,这有点令人担忧。如果这种情况持续下去,你可能会看到这样一家公司,它正试图通过再投资实现增长,但由于销售额没有增长,实际上正在失去市场份额。
另外,中粮卓康食品的流动负债在过去五年中增加到总资产的47%,在一定程度上实际上扭曲了ROCE。如果流动负债没有像以前那样增加,净资产收益率实际上可能会更低。由于目前的负债处于这些水平,供应商或短期债权人实际上为很大一部分业务提供了资金,这可能会带来一些风险。
关键的外卖
从以上分析中,我们发现令人担忧的是,中粮卓康食品的资本回报率和销售额都有所下降,而与此同时,该业务的资本使用量却比五年前有所增加。然而,尽管基本面不佳,但该股在过去五年中大幅上涨了125%,因此投资者似乎非常乐观。无论如何,目前的潜在趋势对长期表现来说都不是好兆头,所以除非它们逆转,否则我们将开始寻找其他地方。
另外,我们发现中粮卓康食品的2个警示标志你可能会想知道。
如果你想搜索更多高回报的股票,看看这个免费资产负债表稳健,股本回报率也很高的股票名单。
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本文由Simply Wall St.撰写,具有概括性。我们仅使用不偏不倚的方法提供基于历史数据和分析师预测的评论,我们的文章并不打算作为财务建议。它不构成买卖任何股票的建议,也没有考虑你的目标或你的财务状况。我们的目标是为您带来由基本面数据驱动的长期重点分析。请注意,我们的分析可能不会将最新的对价格敏感的公司公告或定性材料考虑在内。Simply Wall St.对上述任何一只股票都没有持仓。