Apex Investment PSC (ADX:APEX) Might Have The Makings Of A Multi-Bagger

Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key financial metrics. One common approach is to try and find a company with returns on capital employed (ROCE) that are increasing, in conjunction with a growing amount of capital employed. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. With that in mind, we've noticed some promising trends at Apex Investment PSC (ADX:APEX) so let's look a bit deeper.

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What Is 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. To calculate this metric for Apex Investment PSC, this is the formula:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)

0.041 = د.إ86m ÷ (د.إ2.3b - د.إ265m) (Based on the trailing twelve months to September 2025).

Thus, Apex Investment PSC has an ROCE of 4.1%. Even though it's in line with the industry average of 4.4%, it's still a low return by itself.

Check out our latest analysis for Apex Investment PSC

Historical performance is a great place to start when researching a stock so above you can see the gauge for Apex Investment PSC's ROCE against it's prior returns. If you're interested in investigating Apex Investment PSC's past further, check out this free graph covering Apex Investment PSC's past earnings, revenue and cash flow.

So How Is Apex Investment PSC's ROCE Trending?

We're delighted to see that Apex Investment PSC is reaping rewards from its investments and is now generating some pre-tax profits. Shareholders would no doubt be pleased with this because the business was loss-making five years ago but is is now generating 4.1% on its capital. Not only that, but the company is utilizing 310% more capital than before, but that's to be expected from a company trying to break into profitability. This can indicate that there's plenty of opportunities to invest capital internally and at ever higher rates, both common traits of a multi-bagger.

The Key Takeaway

To the delight of most shareholders, Apex Investment PSC has now broken into profitability. Since the stock has returned a staggering 383% to shareholders over the last five years, it looks like investors are recognizing these changes. Therefore, we think it would be worth your time to check if these trends are going to continue.

Like most companies, Apex Investment PSC does come with some risks, and we've found 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.