To find a multi-bagger stock, what are the underlying trends we should look for in a business? Ideally, a business will show two trends; firstly a growing return on capital employed (ROCE) and secondly, an increasing amount of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. Speaking of which, we noticed some great changes in Jiangsu Cnano Technology's (SHSE:688116) returns on capital, so let's have a look.
Understanding Return On Capital Employed (ROCE)
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. Analysts use this formula to calculate it for Jiangsu Cnano Technology:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.14 = CN¥421m ÷ (CN¥3.7b - CN¥623m) (Based on the trailing twelve months to June 2022).
So, Jiangsu Cnano Technology has an ROCE of 14%. In absolute terms, that's a satisfactory return, but compared to the Chemicals industry average of 9.7% it's much better.
See our latest analysis for Jiangsu Cnano Technology
SHSE:688116 Return on Capital Employed September 27th 2022
In the above chart we have measured Jiangsu Cnano Technology'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 Jiangsu Cnano Technology here for free.
What Can We Tell From Jiangsu Cnano Technology's ROCE Trend?
Jiangsu Cnano Technology is displaying some positive trends. The data shows that returns on capital have increased substantially over the last five years to 14%. The company is effectively making more money per dollar of capital used, and it's worth noting that the amount of capital has increased too, by 742%. The increasing returns on a growing amount of capital is common amongst multi-baggers and that's why we're impressed.
On a related note, the company's ratio of current liabilities to total assets has decreased to 17%, which basically reduces it's funding from the likes of short-term creditors or suppliers. So this improvement in ROCE has come from the business' underlying economics, which is great to see.
The Bottom Line
To sum it up, Jiangsu Cnano Technology has proven it can reinvest in the business and generate higher returns on that capital employed, which is terrific. And with the stock having performed exceptionally well over the last three years, these patterns are being accounted for by investors. So given the stock has proven it has promising trends, it's worth researching the company further to see if these trends are likely to persist.
One more thing to note, we've identified 1 warning sign with Jiangsu Cnano Technology and understanding this should be part of your investment process.
While Jiangsu Cnano Technology isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets.
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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.
要找到一只多袋股票,我们应该在一家企业中寻找什么潜在趋势?理想情况下,一家企业将呈现两种趋势;第一,增长退货关于已使用资本(ROCE),第二,增加金额已动用资本的比例。归根结底,这表明它是一家正在以越来越高的回报率对利润进行再投资的企业。说到这里,我们注意到了一些很大的变化江苏中野科技(上海证券交易所:688116)资本回报率,让我们来看看。
了解资本回报率(ROCE)
对于那些不确定ROCE是什么的人,它衡量的是一家公司可以从其业务中使用的资本产生的税前利润。分析师对江苏中野科技的计算公式如下:
已动用资本回报率=息税前收益(EBIT)?(总资产-流动负债)
0.14=CN元4.21亿?(CN元37亿-CN元6.23亿)(根据截至2022年6月的往绩12个月计算).
所以,江苏中野科技ROCE为14%。就绝对值而言,这是一个令人满意的回报率,但与化工行业9.7%的平均回报率相比,这要好得多。
查看我们对江苏中野科技的最新分析
上证综指:2022年9月27日资本回报率688116
在上面的图表中,我们比较了江苏中诺科技之前的净资产收益率和之前的表现,但可以说,未来更重要。如果你愿意,你可以在这里查看江苏中野科技分析师的预测免费的。
从江苏中诺科技的ROCE趋势可以看出什么?
江苏中诺科技正呈现出一些积极的趋势。数据显示,过去五年,资本回报率大幅上升至14%。该公司实际上每使用一美元资本就能赚到更多的钱,值得注意的是,资本额也增加了742%。越来越多的资本带来越来越多的回报,这在多头投资者中很常见,这就是为什么我们对此印象深刻。
另外,该公司的流动负债与总资产之比已降至17%,这基本上减少了该公司从短期债权人或供应商等方面获得的资金。因此,ROCE的这种改善来自于企业的基础经济,这一点很好。
底线
总而言之,江苏中野科技已经证明,它可以对业务进行再投资,并从投入的资本中产生更高的回报,这是非常棒的。随着该股在过去三年中表现异常出色,这些模式得到了投资者的考虑。因此,鉴于该股已证明其趋势看好,有必要对该公司进行进一步研究,看看这些趋势是否可能持续下去。
还有一件事需要注意,我们已经确定了1个警告标志与江苏中诺科技合作,并理解这应该是您投资过程的一部分。
虽然江苏中野科技并没有获得最高的回报,但看看这个免费资产负债表稳健、股本回报率高的公司名单。
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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。