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

If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing 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. So on that note, Glintt - Global Intelligent Technologies (ELI:GLINT) looks quite promising in regards to its trends of return on capital.

What Is Return On Capital Employed (ROCE)?

Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. Analysts use this formula to calculate it for Glintt - Global Intelligent Technologies:

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

0.10 = €12m ÷ (€190m - €71m) (Based on the trailing twelve months to June 2023).

So, Glintt - Global Intelligent Technologies has an ROCE of 10%. In absolute terms, that's a pretty standard return but compared to the IT industry average it falls behind.

See 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'd like to look at how Glintt - Global Intelligent Technologies has performed in the past in other metrics, you can view this free graph of past earnings, revenue and cash flow.

What The Trend Of ROCE Can Tell Us

Glintt - Global Intelligent Technologies is showing promise given that its ROCE is trending up and to the right. The figures show that over the last five years, ROCE has grown 215% whilst employing roughly the same amount of capital. So our take on this is that the business has increased efficiencies to generate these higher returns, all the while not needing to make any additional investments. It's worth looking deeper into this though because while it's great that the business is more efficient, it might also mean that going forward the areas to invest internally for the organic growth are lacking.

Our Take On Glintt - Global Intelligent Technologies' ROCE

To bring it all together, Glintt - Global Intelligent Technologies has done well to increase the returns it's generating from its capital employed. And with the stock having performed exceptionally well over the last five years, these patterns are being accounted for by investors. Therefore, we think it would be worth your time to check if these trends are going to continue.

If you'd like to know about the risks facing Glintt - Global Intelligent Technologies, we've discovered 3 warning signs that you should be aware of.

While Glintt - Global Intelligent Technologies 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.