Yahoo Finance Returns Are Gaining Momentum At Atlantic Navigation Holdings (Singapore) (Catalist:5UL)
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. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. With that in mind, we've noticed some promising trends at Atlantic Navigation Holdings (Singapore) (Catalist:5UL) so let's look a bit deeper.
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. Analysts use this formula to calculate it for Atlantic Navigation Holdings (Singapore):
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.17 = US$23m ÷ (US$170m - US$36m) (Based on the trailing twelve months to December 2023).
Thus, Atlantic Navigation Holdings (Singapore) has an ROCE of 17%. On its own, that's a standard return, however it's much better than the 10% generated by the Energy Services industry.
See our latest analysis for Atlantic Navigation Holdings (Singapore)
Historical performance is a great place to start when researching a stock so above you can see the gauge for Atlantic Navigation Holdings (Singapore)'s ROCE against it's prior returns. If you'd like to look at how Atlantic Navigation Holdings (Singapore) has performed in the past in other metrics, you can view this free graph of Atlantic Navigation Holdings (Singapore)'s past earnings, revenue and cash flow.
What Does the ROCE Trend For Atlantic Navigation Holdings (Singapore) Tell Us?
Atlantic Navigation Holdings (Singapore) has not disappointed with their ROCE growth. More specifically, while the company has kept capital employed relatively flat over the last five years, the ROCE has climbed 260% in that same time. Basically the business is generating higher returns from the same amount of capital and that is proof that there are improvements in the company's efficiencies. The company is doing well in that sense, and it's worth investigating what the management team has planned for long term growth prospects.
The Key Takeaway
To sum it up, Atlantic Navigation Holdings (Singapore) is collecting higher returns from the same amount of capital, and that's impressive. And with the stock having performed exceptionally well over the last three years, these patterns are being accounted for by investors. Therefore, we think it would be worth your time to check if these trends are going to continue.
If you'd like to know about the risks facing Atlantic Navigation Holdings (Singapore), we've discovered 1 warning sign that you should be aware of.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
