We Think Tigbur - Temporary Professional Personnel (TLV:TIGBUR) Might Have The DNA Of A Multi-Bagger

Did you know there are some financial metrics that can provide clues of a potential multi-bagger? Ideally, a business will show two trends; firstly a growing return on capital employed (ROCE) and secondly, an increasing 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. And in light of that, the trends we're seeing at Tigbur - Temporary Professional Personnel's (TLV:TIGBUR) look very promising so lets take a look.

Return On Capital Employed (ROCE): What is it?

If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. Analysts use this formula to calculate it for Tigbur - Temporary Professional Personnel:

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

0.21 = ₪30m ÷ (₪357m - ₪210m) (Based on the trailing twelve months to September 2021).

So, Tigbur - Temporary Professional Personnel has an ROCE of 21%. That's a fantastic return and not only that, it outpaces the average of 14% earned by companies in a similar industry.

View our latest analysis for Tigbur - Temporary Professional Personnel

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

What The Trend Of ROCE Can Tell Us

Tigbur - Temporary Professional Personnel is displaying some positive trends. The numbers show that in the last five years, the returns generated on capital employed have grown considerably to 21%. The amount of capital employed has increased too, by 40%. So we're very much inspired by what we're seeing at Tigbur - Temporary Professional Personnel thanks to its ability to profitably reinvest capital.

On a side note, Tigbur - Temporary Professional Personnel's current liabilities are still rather high at 59% of total assets. This effectively means that suppliers (or short-term creditors) are funding a large portion of the business, so just be aware that this can introduce some elements of risk. While it's not necessarily a bad thing, it can be beneficial if this ratio is lower.

Our Take On Tigbur - Temporary Professional Personnel's ROCE

In summary, it's great to see that Tigbur - Temporary Professional Personnel can compound returns by consistently reinvesting capital at increasing rates of return, because these are some of the key ingredients of those highly sought after multi-baggers. Since the stock has returned a staggering 604% 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 Tigbur - Temporary Professional Personnel can keep these trends up, it could have a bright future ahead.

One final note, you should learn about the 2 warning signs we've spotted with Tigbur - Temporary Professional Personnel (including 1 which is a bit concerning) .

Tigbur - Temporary Professional Personnel is not the only stock earning high returns. If you'd like to see more, check out our free list of companies earning high returns on equity with solid fundamentals.

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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.