Did you know there are some financial metrics that can provide clues of a potential multi-bagger? Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an expanding base of capital employed. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. Speaking of which, we noticed some great changes in Angang Steel's (HKG:347) 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. The formula for this calculation on Angang Steel is:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.14 = CN¥9.3b ÷ (CN¥101b - CN¥34b) (Based on the trailing twelve months to March 2022).
Therefore, Angang Steel has an ROCE of 14%. By itself that's a normal return on capital and it's in line with the industry's average returns of 14%.
View our latest analysis for Angang Steel
SEHK:347 Return on Capital Employed July 28th 2022
In the above chart we have measured Angang Steel's prior ROCE against its prior performance, but the future is arguably more important. If you're interested, you can view the analysts predictions in our free report on analyst forecasts for the company.
What Does the ROCE Trend For Angang Steel Tell Us?
Investors would be pleased with what's happening at Angang Steel. The numbers show that in the last five years, the returns generated on capital employed have grown considerably to 14%. Basically the business is earning more per dollar of capital invested and in addition to that, 25% more capital is being employed now too. This can indicate that there's plenty of opportunities to invest capital internally and at ever higher rates, a combination that's common among multi-baggers.
In Conclusion...
A company that is growing its returns on capital and can consistently reinvest in itself is a highly sought after trait, and that's what Angang Steel has. Given the stock has declined 34% in the last five years, this could be a good investment if the valuation and other metrics are also appealing. So researching this company further and determining whether or not these trends will continue seems justified.
One more thing, we've spotted 1 warning sign facing Angang Steel that you might find interesting.
For those who like to invest in solid companies, check out this free list of companies with solid balance sheets and high returns 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 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.
你知道嗎,有一些財務指標可以提供潛在的多管齊下的線索?首先,我們希望看到一個經過驗證的退貨關於已使用資本(ROCE)的增長,其次是擴張基地已動用資本的比例。如果你看到這個,通常意味着它是一家擁有出色商業模式和大量有利可圖的再投資機會的公司。説到這裏,我們注意到了一些很大的變化鞍鋼的(HKG:347)資本回報率,讓我們來看看。
瞭解資本回報率(ROCE)
對於那些不確定ROCE是什麼的人,它衡量的是一家公司可以從其業務中使用的資本產生的税前利潤。鞍鋼的這一計算公式為:
已動用資本回報率=息税前收益(EBIT)?(總資產-流動負債)
0.14=CN元93億?(CN元101B-CN元340億)(根據截至2022年3月的往績12個月計算).
所以呢,鞍鋼股份的淨資產收益率為14%。這本身就是正常的資本回報率,與該行業14%的平均回報率一致。
查看我們對鞍鋼的最新分析
聯交所:347 2022年7月28日資本回報率
在上圖中,我們將鞍鋼之前的淨資產收益率與之前的業績進行了比較,但可以説,未來更重要。如果您感興趣,您可以在我們的免費分析師對該公司的預測報告。
鞍鋼的ROCE走勢告訴我們什麼?
投資者會對鞍鋼正在發生的事情感到滿意。數據顯示,在過去五年中,資本回報率大幅增長至14%。基本上,企業每投入一美元資本就能賺到更多的錢,除此之外,現在使用的資本也增加了25%。這可能表明,有很多機會在內部以更高的利率進行資本投資,這種組合在多頭投資者中很常見。
總之..。
一家資本回報率不斷增長、能夠持續對自身進行再投資的公司是一個備受追捧的特徵,這就是鞍鋼所擁有的。鑑於該公司股價在過去五年中下跌了34%,如果估值和其他指標也具有吸引力,這可能是一筆不錯的投資。因此,進一步研究這家公司,並確定這些趨勢是否會繼續下去似乎是合理的。
還有一件事,我們發現了1個警告標誌面對鞍鋼,你可能會感興趣。
對於那些喜歡投資於穩固的公司,看看這個免費資產負債表穩健、股本回報率高的公司名單。
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本文由Simply Wall St.撰寫,具有概括性。我們僅使用不偏不倚的方法提供基於歷史數據和分析師預測的評論,我們的文章並不打算作為財務建議。它不構成買賣任何股票的建議,也沒有考慮你的目標或你的財務狀況。我們的目標是為您帶來由基本面數據驅動的長期重點分析。請注意,我們的分析可能不會將最新的對價格敏感的公司公告或定性材料考慮在內。Simply Wall St.對上述任何一隻股票都沒有持倉。