Does Glintt - Global Intelligent Technologies (ELI:GLINT) Have The Makings Of A Multi-Bagger?

To find a multi-bagger stock, what are the underlying trends we should look for in a business? 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. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. Speaking of which, we noticed some great changes in Glintt - Global Intelligent Technologies' (ELI:GLINT) returns on capital, so let's have 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. The formula for this calculation on Glintt - Global Intelligent Technologies is:

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

0.055 = €6.6m ÷ (€181m - €61m) (Based on the trailing twelve months to September 2020).

So, Glintt - Global Intelligent Technologies has an ROCE of 5.5%. Ultimately, that's a low return and it under-performs the IT industry average of 13%.

View our latest analysis for Glintt - Global Intelligent Technologies

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

What Does the ROCE Trend For Glintt - Global Intelligent Technologies Tell Us?

You'd find it hard not to be impressed with the ROCE trend at Glintt - Global Intelligent Technologies. We found that the returns on capital employed over the last five years have risen by 183%. That's a very favorable trend because this means that the company is earning more per dollar of capital that's being employed. In regards to capital employed, Glintt - Global Intelligent Technologies appears to been achieving more with less, since the business is using 21% less capital to run its operation. If this trend continues, the business might be getting more efficient but it's shrinking in terms of total assets.

In Conclusion...

In the end, Glintt - Global Intelligent Technologies has proven it's capital allocation skills are good with those higher returns from less amount of capital. Astute investors may have an opportunity here because the stock has declined 20% in the last five years. That being the case, research into the company's current valuation metrics and future prospects seems fitting.

If you'd like to know more about Glintt - Global Intelligent Technologies, we've spotted 5 warning signs, and 1 of them doesn't sit too well with us.

If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive returns on equity.

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