Stock Analysis

Koncar - distributivni i specijalni transformatori d.d (ZGSE:KODT) Has Some Way To Go To Become A Multi-Bagger

ZGSE:KODT
Source: Shutterstock

If you're not sure where to start when looking for the next multi-bagger, there are a few key trends you should keep an eye out for. 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. That's why when we briefly looked at Koncar - distributivni i specijalni transformatori d.d's (ZGSE:KODT) ROCE trend, we were pretty happy with what we saw.

What is Return On Capital Employed (ROCE)?

For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. The formula for this calculation on Koncar - distributivni i specijalni transformatori d.d is:

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

0.11 = Kn72m ÷ (Kn911m - Kn283m) (Based on the trailing twelve months to December 2020).

So, Koncar - distributivni i specijalni transformatori d.d has an ROCE of 11%. That's a relatively normal return on capital, and it's around the 10% generated by the Electrical industry.

View our latest analysis for Koncar - distributivni i specijalni transformatori d.d

roce
ZGSE:KODT Return on Capital Employed April 6th 2021

While the past is not representative of the future, it can be helpful to know how a company has performed historically, which is why we have this chart above. If you want to delve into the historical earnings, revenue and cash flow of Koncar - distributivni i specijalni transformatori d.d, check out these free graphs here.

How Are Returns Trending?

While the returns on capital are good, they haven't moved much. The company has consistently earned 11% for the last five years, and the capital employed within the business has risen 68% in that time. 11% is a pretty standard return, and it provides some comfort knowing that Koncar - distributivni i specijalni transformatori d.d has consistently earned this amount. Stable returns in this ballpark can be unexciting, but if they can be maintained over the long run, they often provide nice rewards to shareholders.

What We Can Learn From Koncar - distributivni i specijalni transformatori d.d's ROCE

The main thing to remember is that Koncar - distributivni i specijalni transformatori d.d has proven its ability to continually reinvest at respectable rates of return. And the stock has done incredibly well with a 194% return over the last five years, so long term investors are no doubt ecstatic with that result. So even though the stock might be more "expensive" than it was before, we think the strong fundamentals warrant this stock for further research.

Koncar - distributivni i specijalni transformatori d.d does have some risks though, and we've spotted 2 warning signs for Koncar - distributivni i specijalni transformatori d.d that you might be interested in.

While Koncar - distributivni i specijalni transformatori d.d isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets.

If you’re looking to trade Koncar - distributivni i specijalni transformatori d.d, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted


If you're looking to trade Koncar - distributivni i specijalni transformatori d.d, open an account with the lowest-cost platform trusted by professionals, Interactive Brokers.

With clients in over 200 countries and territories, and access to 160 markets, IBKR lets you trade stocks, options, futures, forex, bonds and funds from a single integrated account.

Enjoy no hidden fees, no account minimums, and FX conversion rates as low as 0.03%, far better than what most brokers offer.

Sponsored Content

Valuation is complex, but we're here to simplify it.

Discover if Koncar - distributivni i specijalni transformatori d.d might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.

Access Free Analysis

This article by Simply Wall St is general in nature. 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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020


Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

About ZGSE:KODT

Koncar - distributivni i specijalni transformatori d.d

Together with its subsidiary, engages in the design, production, sale, and servicing of distribution, special, and medium power transformers.

Outstanding track record with flawless balance sheet.