The Returns At MMIS Berhad (KLSE:MMIS) Aren't Growing

There are a few key trends to look for if we want to identify the next 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. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. So, when we ran our eye over MMIS Berhad's (KLSE:MMIS) trend of ROCE, we liked what we saw.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

What Is 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. The formula for this calculation on MMIS Berhad is:

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

0.12 = RM8.1m ÷ (RM80m - RM11m) (Based on the trailing twelve months to June 2025).

Thus, MMIS Berhad has an ROCE of 12%. In absolute terms, that's a satisfactory return, but compared to the Semiconductor industry average of 9.3% it's much better.

Check out our latest analysis for MMIS Berhad

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

What Does the ROCE Trend For MMIS Berhad Tell Us?

The trend of ROCE doesn't stand out much, but returns on a whole are decent. The company has consistently earned 12% for the last five years, and the capital employed within the business has risen 197% in that time. 12% is a pretty standard return, and it provides some comfort knowing that MMIS Berhad has consistently earned this amount. Over long periods of time, returns like these might not be too exciting, but with consistency they can pay off in terms of share price returns.

In Conclusion...

In the end, MMIS Berhad has proven its ability to adequately reinvest capital at good rates of return. Yet over the last five years the stock has declined 33%, so the decline might provide an opening. For that reason, savvy investors might want to look further into this company in case it's a prime investment.

Since virtually every company faces some risks, it's worth knowing what they are, and we've spotted 4 warning signs for MMIS Berhad (of which 3 make us uncomfortable!) that you should know about.

While MMIS Berhad isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.