Saccheria F.lli Franceschetti (BIT:SAC) Has Some Way To Go To Become A Multi-Bagger

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. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. With that in mind, the ROCE of Saccheria F.lli Franceschetti (BIT:SAC) looks decent, right now, so lets see what the trend of returns can tell us.

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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. To calculate this metric for Saccheria F.lli Franceschetti, this is the formula:

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

0.12 = €1.6m ÷ (€18m - €4.1m) (Based on the trailing twelve months to December 2024).

So, Saccheria F.lli Franceschetti has an ROCE of 12%. On its own, that's a standard return, however it's much better than the 9.7% generated by the Packaging industry.

See our latest analysis for Saccheria F.lli Franceschetti

In the above chart we have measured Saccheria F.lli Franceschetti's prior ROCE against its prior performance, but the future is arguably more important. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for Saccheria F.lli Franceschetti .

What Can We Tell From Saccheria F.lli Franceschetti's ROCE Trend?

The trend of ROCE doesn't stand out much, but returns on a whole are decent. The company has employed 65% more capital in the last four years, and the returns on that capital have remained stable at 12%. 12% is a pretty standard return, and it provides some comfort knowing that Saccheria F.lli Franceschetti 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 Saccheria F.lli Franceschetti's ROCE

The main thing to remember is that Saccheria F.lli Franceschetti has proven its ability to continually reinvest at respectable rates of return. And the stock has followed suit returning a meaningful 12% to shareholders over the last year. So while investors seem to be recognizing these promising trends, we still believe the stock deserves further research.

Like most companies, Saccheria F.lli Franceschetti does come with some risks, and we've found 1 warning sign that you should be aware of.

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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.