We Like These Underlying Return On Capital Trends At S.C. Helios (BVB:HEAL)

There are a few key trends to look for if we want to identify the next multi-bagger. 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. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. With that in mind, we've noticed some promising trends at S.C. Helios (BVB:HEAL) so let's look a bit deeper.

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Understanding 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. The formula for this calculation on S.C. Helios is:

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

0.13 = RON6.1m ÷ (RON60m - RON13m) (Based on the trailing twelve months to June 2025).

So, S.C. Helios has an ROCE of 13%. In absolute terms, that's a satisfactory return, but compared to the Basic Materials industry average of 6.9% it's much better.

View our latest analysis for S.C. Helios

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

The Trend Of ROCE

Investors would be pleased with what's happening at S.C. Helios. The data shows that returns on capital have increased substantially over the last five years to 13%. Basically the business is earning more per dollar of capital invested and in addition to that, 24% more capital is being employed now too. 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.

Our Take On S.C. Helios' ROCE

In summary, it's great to see that S.C. Helios 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. Given the stock has declined 17% in the last year, this could be a good investment if the valuation and other metrics are also appealing. So researching this company further and determining whether or not these trends will continue seems justified.

If you want to continue researching S.C. Helios, you might be interested to know about the 2 warning signs that our analysis has discovered.

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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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.