- Commercial Services
Gielda Praw Majatkowych Vindexus Spolka Akcyjna (WSE:VIN) Could Become A Multi-Bagger
Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key financial metrics. Ideally, a business will show two trends; firstly a growing return on capital employed (ROCE) and secondly, an increasing 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. And in light of that, the trends we're seeing at Gielda Praw Majatkowych Vindexus Spolka Akcyjna's (WSE:VIN) look very promising so lets take a look.
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. Analysts use this formula to calculate it for Gielda Praw Majatkowych Vindexus Spolka Akcyjna:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.20 = zł64m ÷ (zł346m - zł35m) (Based on the trailing twelve months to September 2022).
Thus, Gielda Praw Majatkowych Vindexus Spolka Akcyjna has an ROCE of 20%. In absolute terms that's a very respectable return and compared to the Commercial Services industry average of 17% it's pretty much on par.
See our latest analysis for Gielda Praw Majatkowych Vindexus Spolka Akcyjna
Historical performance is a great place to start when researching a stock so above you can see the gauge for Gielda Praw Majatkowych Vindexus Spolka Akcyjna's ROCE against it's prior returns. If you'd like to look at how Gielda Praw Majatkowych Vindexus Spolka Akcyjna 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 Gielda Praw Majatkowych Vindexus Spolka Akcyjna's ROCE Trend?
We like the trends that we're seeing from Gielda Praw Majatkowych Vindexus Spolka Akcyjna. The data shows that returns on capital have increased substantially over the last five years to 20%. The amount of capital employed has increased too, by 30%. This can indicate that there's plenty of opportunities to invest capital internally and at ever higher rates, a combination that's common among multi-baggers.
In summary, it's great to see that Gielda Praw Majatkowych Vindexus Spolka Akcyjna 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. And given the stock has remained rather flat over the last five years, there might be an opportunity here if other metrics are strong. With that in mind, we believe the promising trends warrant this stock for further investigation.
One more thing, we've spotted 2 warning signs facing Gielda Praw Majatkowych Vindexus Spolka Akcyjna that you might find interesting.
Gielda Praw Majatkowych Vindexus Spolka Akcyjna 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.
Valuation is complex, but we're helping make it simple.
Find out whether Gielda Praw Majatkowych Vindexus Spolka Akcyjna is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free Analysis
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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.
Gielda Praw Majatkowych Vindexus Spolka Akcyjna
Gielda Praw Majatkowych Vindexus Spolka Akcyjna provides a range of debt management services in Poland.
Flawless balance sheet and good value.