OPUS GLOBAL Nyrt (BUSE:OPUS) Is Doing The Right Things To Multiply Its Share Price

What trends should we look for it we want to identify stocks that can multiply in value over the long term? Amongst other things, we'll want to see two things; firstly, a growing return on capital employed (ROCE) and secondly, an expansion in the company's amount 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 OPUS GLOBAL Nyrt's (BUSE:OPUS) returns on capital, so let's have a look.

Understanding Return On Capital Employed (ROCE)

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 OPUS GLOBAL Nyrt:

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

0.051 = Ft40b ÷ (Ft1.1t - Ft279b) (Based on the trailing twelve months to March 2024).

Therefore, OPUS GLOBAL Nyrt has an ROCE of 5.1%. In absolute terms, that's a low return but it's around the Industrials industry average of 6.2%.

See our latest analysis for OPUS GLOBAL Nyrt

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 , check out these free graphs detailing revenue and cash flow performance of OPUS GLOBAL Nyrt.

What Does the ROCE Trend For OPUS GLOBAL Nyrt Tell Us?

We're delighted to see that OPUS GLOBAL Nyrt 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 5.1% on its capital. In addition to that, OPUS GLOBAL Nyrt is employing 95% more capital than previously which is expected of a company that's trying to break into profitability. This can tell us that the company has plenty of reinvestment opportunities that are able to generate higher returns.

The Bottom Line

In summary, it's great to see that OPUS GLOBAL Nyrt has managed to break into profitability and is continuing to reinvest in its business. Since the stock has only returned 19% to shareholders over the last five years, the promising fundamentals may not be recognized yet by investors. So with that in mind, we think the stock deserves further research.

While OPUS GLOBAL Nyrt looks impressive, no company is worth an infinite price. The intrinsic value infographic for OPUS helps visualize whether it is currently trading for a fair price.

While OPUS GLOBAL Nyrt may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here.

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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.