We Like These Underlying Trends At OPUS GLOBAL Nyrt (BUSE:OPUS)

There are a few key trends to look for if we want to identify the next multi-bagger. 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. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. So when we looked at OPUS GLOBAL Nyrt (BUSE:OPUS) and its trend of ROCE, we really liked what we saw.

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. The formula for this calculation on OPUS GLOBAL Nyrt is:

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

0.026 = Ft10b ÷ (Ft520b - Ft126b) (Based on the trailing twelve months to June 2020).

So, OPUS GLOBAL Nyrt has an ROCE of 2.6%. In absolute terms, that's a low return and it also under-performs the Industrials industry average of 5.6%.

View our latest analysis for OPUS GLOBAL Nyrt

Historical performance is a great place to start when researching a stock so above you can see the gauge for OPUS GLOBAL Nyrt's ROCE against it's prior returns. If you'd like to look at how OPUS GLOBAL Nyrt has performed in the past in other metrics, you can view this free graph of past earnings, revenue and cash flow.

What Can We Tell From OPUS GLOBAL Nyrt's ROCE Trend?

While in absolute terms it isn't a high ROCE, it's promising to see that it has been moving in the right direction. The numbers show that in the last five years, the returns generated on capital employed have grown considerably to 2.6%. Basically the business is earning more per dollar of capital invested and in addition to that, 2,847% more capital is being employed now too. The increasing returns on a growing amount of capital is common amongst multi-baggers and that's why we're impressed.

In Conclusion...

A company that is growing its returns on capital and can consistently reinvest in itself is a highly sought after trait, and that's what OPUS GLOBAL Nyrt has. Since the stock has returned a staggering 5,067% to shareholders over the last five years, it looks like investors are recognizing these changes. In light of that, we think it's worth looking further into this stock because if OPUS GLOBAL Nyrt can keep these trends up, it could have a bright future ahead.

If you want to know some of the risks facing OPUS GLOBAL Nyrt we've found 3 warning signs (2 are potentially serious!) that you should be aware of before investing here.

If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive returns on equity.

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