Returns At Cogra 48 Société Anonyme (EPA:ALCOG) Are On The Way Up

If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. Ideally, a business will show two trends; firstly a growing return on capital employed (ROCE) and secondly, an increasing 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. Speaking of which, we noticed some great changes in Cogra 48 Société Anonyme's (EPA:ALCOG) returns on capital, so let's have a look.

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. Analysts use this formula to calculate it for Cogra 48 Société Anonyme:

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

0.15 = €5.5m ÷ (€45m - €8.0m) (Based on the trailing twelve months to December 2023).

Thus, Cogra 48 Société Anonyme has an ROCE of 15%. On its own, that's a standard return, however it's much better than the 8.6% generated by the Forestry industry.

Check out our latest analysis for Cogra 48 Société Anonyme

Historical performance is a great place to start when researching a stock so above you can see the gauge for Cogra 48 Société Anonyme's ROCE against it's prior returns. If you're interested in investigating Cogra 48 Société Anonyme's past further, check out this free graph covering Cogra 48 Société Anonyme's past earnings, revenue and cash flow.

What Can We Tell From Cogra 48 Société Anonyme's ROCE Trend?

Investors would be pleased with what's happening at Cogra 48 Société Anonyme. Over the last five years, returns on capital employed have risen substantially to 15%. The amount of capital employed has increased too, by 95%. So we're very much inspired by what we're seeing at Cogra 48 Société Anonyme thanks to its ability to profitably reinvest capital.

The Key Takeaway

All in all, it's terrific to see that Cogra 48 Société Anonyme is reaping the rewards from prior investments and is growing its capital base. Considering the stock has delivered 9.4% to its stockholders over the last five years, it may be fair to think that investors aren't fully aware of the promising trends yet. So exploring more about this stock could uncover a good opportunity, if the valuation and other metrics stack up.

One more thing to note, we've identified 1 warning sign with Cogra 48 Société Anonyme and understanding it should be part of your investment process.

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