Be Wary Of Azienda Bresciana Petroli Nocivelli (BIT:ABP) And Its Returns On Capital

To find a multi-bagger stock, what are the underlying trends we should look for in a business? Typically, we'll want to notice a trend of growing return on capital employed (ROCE) and alongside that, 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. In light of that, when we looked at Azienda Bresciana Petroli Nocivelli (BIT:ABP) and its ROCE trend, we weren't exactly thrilled.

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Understanding 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 Azienda Bresciana Petroli Nocivelli:

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

0.16 = €14m ÷ (€114m - €27m) (Based on the trailing twelve months to June 2025).

So, Azienda Bresciana Petroli Nocivelli has an ROCE of 16%. In absolute terms, that's a satisfactory return, but compared to the Commercial Services industry average of 8.6% it's much better.

See our latest analysis for Azienda Bresciana Petroli Nocivelli

Above you can see how the current ROCE for Azienda Bresciana Petroli Nocivelli compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like, you can check out the forecasts from the analysts covering Azienda Bresciana Petroli Nocivelli for free.

What Does the ROCE Trend For Azienda Bresciana Petroli Nocivelli Tell Us?

When we looked at the ROCE trend at Azienda Bresciana Petroli Nocivelli, we didn't gain much confidence. To be more specific, ROCE has fallen from 26% over the last five years. However, given capital employed and revenue have both increased it appears that the business is currently pursuing growth, at the consequence of short term returns. If these investments prove successful, this can bode very well for long term stock performance.

What We Can Learn From Azienda Bresciana Petroli Nocivelli's ROCE

In summary, despite lower returns in the short term, we're encouraged to see that Azienda Bresciana Petroli Nocivelli is reinvesting for growth and has higher sales as a result. And the stock has done incredibly well with a 102% return over the last three years, so long term investors are no doubt ecstatic with that result. So while investors seem to be recognizing these promising trends, we would look further into this stock to make sure the other metrics justify the positive view.

While Azienda Bresciana Petroli Nocivelli doesn't shine too bright in this respect, it's still worth seeing if the company is trading at attractive prices. You can find that out with our FREE intrinsic value estimation for ABP on our platform.

While Azienda Bresciana Petroli Nocivelli 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.