Return on Invested Capital – As Travel OFFL http://astraveloffl.com/ Fri, 22 Oct 2021 23:10:07 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 https://astraveloffl.com/wp-content/uploads/2021/04/cropped-icon-32x32.png Return on Invested Capital – As Travel OFFL http://astraveloffl.com/ 32 32 Some investors may be concerned about Cabbeen Fashion’s return on capital (HKG: 2030) https://astraveloffl.com/some-investors-may-be-concerned-about-cabbeen-fashions-return-on-capital-hkg-2030/ https://astraveloffl.com/some-investors-may-be-concerned-about-cabbeen-fashions-return-on-capital-hkg-2030/#respond Fri, 22 Oct 2021 22:50:09 +0000 https://astraveloffl.com/some-investors-may-be-concerned-about-cabbeen-fashions-return-on-capital-hkg-2030/ Finding a business that has the potential to grow significantly isn’t easy, but it is possible if we take a look at a few key financial metrics. First, we will want to see a to recover on capital employed (ROCE) which increases and, on the other hand, a based capital employed. Put simply, these types […]]]>

Finding a business that has the potential to grow significantly isn’t easy, but it is possible if we take a look at a few key financial metrics. First, we will want to see a to recover on capital employed (ROCE) which increases and, on the other hand, a based capital employed. Put simply, these types of businesses are dialing machines, which means they continually reinvest their profits at ever higher rates of return. However, after investigation Cabbeen Mode (HKG: 2030), we don’t think the current trends fit the mold of a multi-bagger.

What is Return on Employee Capital (ROCE)?

Just to clarify if you’re not sure, ROCE is a measure of the pre-tax income (as a percentage) that a business earns on the capital invested in its business. The formula for this calculation on Cabbeen Fashion is:

Return on capital employed = Profit before interest and taxes (EBIT) ÷ (Total assets – Current liabilities)

0.16 = CN ¥ 267m ÷ (CN ¥ 2.3b – CN ¥ 605m) (Based on the last twelve months up to June 2021).

Therefore, Cabbeen Fashion has a ROCE of 16%. On its own, that’s a standard return, but it’s far better than the 6.7% generated by the luxury industry.

Check out our latest review for Cabbeen Fashion

SEHK: 2030 Return on capital employed October 22, 2021

Historical performance is a great place to start when looking for a stock. So above you can see the gauge of Cabbeen Fashion’s ROCE compared to its past returns. If you want to look at Cabbeen Fashion’s performance in the past in other metrics, you can check out this free graph of past income, income and cash flow.

How are the returns evolving?

In terms of Cabbeen Fashion’s historic ROCE moves, the trend isn’t fantastic. Over the past five years, return on capital has declined to 16%, down from 33% five years ago. Meanwhile, the company is using more capital, but it hasn’t changed much in terms of sales over the past 12 months, so it might reflect longer-term investments. It’s worth keeping an eye on the company’s profits from now on to see if those investments end up contributing to the bottom line.

In addition, Cabbeen Fashion has done well to reduce its liabilities to 27% of total assets. So we could link some of that to the decrease in ROCE. In effect, this means that their suppliers or short-term creditors fund the business less, which reduces some elements of risk. Some argue that this reduces the company’s efficiency in generating ROCE since it now finances more of the operations with its own money.

Our opinion on Cabbeen Fashion’s ROCE

To conclude, we have seen that Cabbeen Fashion is reinvesting in the business, but the returns are declining. Yet for long-term shareholders, the stock has offered them an incredible 125% return over the past five years, so the market seems bullish on its future. Ultimately, if the underlying trends persist, we won’t be holding our breath that this is multi-bagging in the future.

On a final note, we found 3 warning signs for Cabbeen Fashion (1 is not doing too well with us) you should be aware of.

While Cabbeen Fashion does not currently generate the highest returns, we have compiled a list of companies that currently generate over 25% return on equity. Check it out free list here.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in the mentioned stocks.

Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.

]]>
https://astraveloffl.com/some-investors-may-be-concerned-about-cabbeen-fashions-return-on-capital-hkg-2030/feed/ 0
Those who invested in Herc Holdings (NYSE: HRI) five years ago are up 520% https://astraveloffl.com/those-who-invested-in-herc-holdings-nyse-hri-five-years-ago-are-up-520/ https://astraveloffl.com/those-who-invested-in-herc-holdings-nyse-hri-five-years-ago-are-up-520/#respond Wed, 20 Oct 2021 11:00:04 +0000 https://astraveloffl.com/those-who-invested-in-herc-holdings-nyse-hri-five-years-ago-are-up-520/ For many, the main goal of investing in the stock market is to earn spectacular returns. Sure, the best companies are hard to find, but they can generate massive returns over long periods of time. You do not believe it ? Then watch the Herc Holdings Inc. (NYSE: HRI) share price. This is 518% more […]]]>

For many, the main goal of investing in the stock market is to earn spectacular returns. Sure, the best companies are hard to find, but they can generate massive returns over long periods of time. You do not believe it ? Then watch the Herc Holdings Inc. (NYSE: HRI) share price. This is 518% more than five years ago. If that doesn’t make you think about investing for the long term, we don’t know what will. On top of that, the share price rose 55% in about a quarter. Anyone who has stood for this rewarding race would probably want to talk about it.

Now, it’s worth looking at the fundamentals of the business as well, as this will help us determine whether the long-term return to shareholders matches the performance of the underlying business.

See our latest analysis for Herc Holdings

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are overly responsive dynamic systems and investors are not always rational. An imperfect but straightforward way to consider how a company’s market perception has changed is to compare the evolution of earnings per share (EPS) with the movement of the share price.

Over half a decade, Herc Holdings has managed to increase its earnings per share to 11% per year. This EPS growth is lower than the 44% average annual increase in the share price. This suggests that market participants hold society in the highest regard these days. And that’s hardly shocking given the growth history.

You can see below how the EPS has evolved over time (find out the exact values ​​by clicking on the image).

NYSE: HRI Earnings Per Share Growth October 20, 2021

We know that Herc Holdings has improved its results lately, but will it increase its revenues? If you are interested, you can check this free report showing consensus revenue forecast.

A different perspective

We are pleased to report that Herc Holdings shareholders received a total shareholder return of 299% over one year. And that includes the dividend. This is better than the annualized return of 44% over half a decade, which implies that the company has been doing better recently. At the best of times, this can portend real business momentum, meaning that now may be a good time to dig deeper. While it is worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider risks, for example. Every business has them, and we’ve spotted 2 warning signs for Herc Holdings you should know.

But beware : Herc Holdings may not be the best stock to buy. So take a look at this free list of interesting companies with past earnings growth (and new growth forecasts).

Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently traded on US stock exchanges.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in the mentioned stocks.

Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.

]]>
https://astraveloffl.com/those-who-invested-in-herc-holdings-nyse-hri-five-years-ago-are-up-520/feed/ 0
These 2 Nasdaq Stocks Could Wear Your Portfolio For Years https://astraveloffl.com/these-2-nasdaq-stocks-could-wear-your-portfolio-for-years/ https://astraveloffl.com/these-2-nasdaq-stocks-could-wear-your-portfolio-for-years/#respond Sat, 16 Oct 2021 11:00:00 +0000 https://astraveloffl.com/these-2-nasdaq-stocks-could-wear-your-portfolio-for-years/ The Nasdaq 100 has seen a huge run since the pandemic hit the stock market. Most investors want a share of this stock, but high valuations and market volatility might keep you from diving into the overall index. Still, some of the big Nasdaq stocks are great candidates for long-term investors or retirement accounts. These […]]]>

The Nasdaq 100 has seen a huge run since the pandemic hit the stock market. Most investors want a share of this stock, but high valuations and market volatility might keep you from diving into the overall index.

Still, some of the big Nasdaq stocks are great candidates for long-term investors or retirement accounts. These two can offer a combination of stability and growth to fuel your portfolio over the long term.

Amazon

Amazon (NASDAQ: AMZN) It might seem like an obvious inclusion here, but let’s take a moment to dissect why it’s a stock you can keep in your portfolio for years.

A leader in the highly fragmented e-commerce world, Amazon holds around 40% of the US market and nearly 8% of the global market.

It is almost certain that online sales will continue to increase as a percentage of total retail sales, and the overall e-commerce market is expected to grow by around 10% over the next few years.

The company will certainly experience increased competition from all angles. All kinds of physical retailers have emerged from pandemic closures with strong digital commerce channels. Small direct-to-consumer sellers and niche markets are able to carve out a niche in the market through Shopify and other benefits.

Even with this competition, Amazon’s market share and competitive advantages are so large that it would take a long time for its e-commerce segment to lose value.

Source: Getty Images.

But Amazon is not just an online retailer. Prime Video is one of the top three streaming services, with 175 million people streaming video in the past year. Amazon Web Services (AWS) is the global leader in cloud infrastructure services, with over 30% market share. AWS contributed over 13% of the company’s total revenue in the last quarter, so this is a big part of the story that is likely to get even bigger. Amazon is even a major player in the grocery store landscape, having acquired Whole Foods and its 500 stores in 2017.

Too much would have to go wrong for Amazon to fail in the short term. It is not a product that can become obsolete, it has become a diverse giant, and its scale creates advantages over its more capable competitors.

Amazon’s competitive advantage and economic divide is also significant. Return on invested capital (ROIC) measures the efficiency with which a company can use its financial assets to generate profits. Amazon’s 16% ROIC is pretty high, especially for a company that prioritizes growth over short-term earnings. This indicates a wide gap. It is also proof of effective pricing and trading power.

Amazon also has more than just stamina – it’s still a decent growth game. Its days of explosive expansion are in the rear view mirror, but the forecast still calls for 20% growth over the next several years. This is on the heels of last year’s 30% growth, fueled by consumer home shopping and increased adoption of cloud computing. This forecast makes Amazon’s forward price-to-earnings (P / E) ratio of 45.6 seem much cheaper, with a more modest price-to-earnings-growth (PEG) ratio of 2.28.

Given its massive size, Amazon is unlikely to be the top performing stock over the next decade. This stock will likely be owned by a small cap stock that emerges to compete with the big ones. However, Amazon is still expected to overtake the market while providing enviable stability.

Costco

Costco (NASDAQ: COT) is not an exotic technological value with unlimited growth potential. However, it is a good candidate to generate constant growth that can overtake the market.

With more than 800 stores in North America, Europe, Asia and Australia, Costco sells a wide variety of consumer staples like groceries, housewares and clothing. It also carries expensive cyclical items such as electronics, furniture, and appliances.

Costco has done a great job over the past few years to develop its ecommerce sales channel, which is helping drive overall growth. It’s a really diverse retailer, which is great for stability. Costco’s wholesale approach and warehouse-store model also allows it to offer some of the best prices in the market, so the chain tends to perform well during recessions when households are cutting back on spending and are looking for value.

Woman shopping in bulk grocery store.

Source: Getty Images

Even more exciting for investors, Costco operates with a club membership model. Customers must pay an annual subscription for the right to shop. These expenses were equivalent to nearly 58% of the company’s operating profit in the most recent fiscal year, so they contribute significantly to the bottom line. With over 90% member retention, Costco clearly demonstrates its value to consumers, and its cash flow is much more predictable than that of retailers who rely solely on the sale of merchandise.

Much like Amazon, Costco has an impressive ROIC of 18.2%. This further validates the stability argument, even in a highly competitive environment. Investors should also be drawn to Costco’s growth potential. The chain has averaged over 10% annual sales growth in recent years and is expected to maintain an 8% growth rate over the next two years. You won’t get this from Walmart, Target, Where BJ.

Costco stock is quite expensive with a forward P / E ratio of 38 and an enterprise value / EBITDA ratio of 23. This opens the door to slightly larger losses during market declines, as is. generally the case for high valued stocks. Yet these ratios are not high enough to deter me from a long term investment. Costco should easily achieve this valuation if you give it enough time.

10 stocks we like better than Costco Wholesale
When our award-winning team of analysts have stock advice, it can pay off to listen. After all, the newsletter they’ve been running for over a decade, Motley Fool Equity Advisor, has tripled the market. *

They just revealed what they think are the top ten stocks investors can buy right now … and Costco Wholesale wasn’t one of them! That’s right – they think these 10 stocks are even better buys.

See the 10 actions

* The portfolio advisor returns on September 17, 2021

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of the board of directors of The Motley Fool. Ryan Downie owns shares of Amazon. The Motley Fool owns stock and recommends Amazon, Costco Wholesale, and Shopify. The Motley Fool recommends the following options: January 2022 long calls at $ 1,920 on Amazon, January 2023 long calls at $ 1,140 on Shopify, January 2022 short calls at $ 1,940 on Amazon, and short calls January 2023 at $ 1,160 on Shopify. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

]]>
https://astraveloffl.com/these-2-nasdaq-stocks-could-wear-your-portfolio-for-years/feed/ 0
Investors have encountered slowing returns on capital at MTN Group (JSE: MTN) https://astraveloffl.com/investors-have-encountered-slowing-returns-on-capital-at-mtn-group-jse-mtn/ https://astraveloffl.com/investors-have-encountered-slowing-returns-on-capital-at-mtn-group-jse-mtn/#respond Fri, 15 Oct 2021 05:31:09 +0000 https://astraveloffl.com/investors-have-encountered-slowing-returns-on-capital-at-mtn-group-jse-mtn/ There are a few key trends to look for if we are to identify the next multi-bagger. A common approach is to try to find a business with Return on capital employed (ROCE) which increases, in line with growth amount capital employed. If you see this, it usually means it’s a company with a great […]]]>

There are a few key trends to look for if we are to identify the next multi-bagger. A common approach is to try to find a business with Return on capital employed (ROCE) which increases, in line with growth amount capital employed. If you see this, it usually means it’s a company with a great business model and plenty of profitable reinvestment opportunities. To concern MTN Group (JSE: MTN) he has a high ROCE right now, but let’s see how the returns go.

What is Return on Employee Capital (ROCE)?

Just to clarify if you’re not sure, ROCE is a measure of the pre-tax income (as a percentage) that a business earns on the capital invested in its business. To calculate this metric for MTN Group, here is the formula:

Return on capital employed = Profit before interest and taxes (EBIT) ÷ (Total assets – Current liabilities)

0.21 = R51b (R348b – R109b) (Based on the last twelve months up to June 2021).

Thereby, MTN Group has a ROCE of 21%. On its own, that’s a great ROCE, but it falls short of the 39% generated by the wireless industry.

See our latest analysis for MTN Group

JSE: Return on capital invested by MTN on October 15, 2021

Above you can see how MTN Group’s current ROCE compares to its previous returns on capital, but there is little you can say about the past. If you want, you can check out the analysts’ forecasts covering the MTN Group here for free.

So, what is the evolution of the ROCE of the MTN group?

Over the past five years, the ROCE and capital employed of MTN Group have both remained broadly stable. It is not uncommon to see this when looking at a mature, stable company that does not reinvest its profits because it is likely past this phase of the business cycle. While current yields are high, we would need more evidence of the underlying growth to make it look like multi-bagging going forward. With fewer investment opportunities, it makes sense that MTN Group paid a good 49% of its profits to shareholders. Unless companies have very good growth opportunities, they will generally return money to shareholders.

Our opinion on the ROCE of the MTN group

Although MTN Group has an impressive return on capital, it is not increasing this amount. Given that the stock has gained an impressive 65% over the past five years, investors must think there are better things to come. Ultimately, if the underlying trends persist, we won’t be holding our breath that this is multi-bagging in the future.

MTN Group does have some risks, however, and we have spotted 3 warning signs for MTN Group that might interest you.

If you want to look for other stocks that have generated high returns, check out this free list of stocks with strong balance sheets that also generate high returns on equity.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.

Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.

]]>
https://astraveloffl.com/investors-have-encountered-slowing-returns-on-capital-at-mtn-group-jse-mtn/feed/ 0
Kearny Financial Corp’s Dividend Growth Potential Analysis https://astraveloffl.com/kearny-financial-corps-dividend-growth-potential-analysis/ https://astraveloffl.com/kearny-financial-corps-dividend-growth-potential-analysis/#respond Wed, 13 Oct 2021 21:51:33 +0000 https://astraveloffl.com/kearny-financial-corps-dividend-growth-potential-analysis/ Business accounting concept, businessman using calculator with laptop, budget and loan … [+] paper in the office. getty Summary of September choices Based on price performance, the Dividend Growth Stocks model portfolio (-1.9%) underperformed the S&P 500 (-0.8%) by 1.1% from August 26, 2021 to September 27, 2021. On Based on total return, the Model […]]]>

Summary of September choices

Based on price performance, the Dividend Growth Stocks model portfolio (-1.9%) underperformed the S&P 500 (-0.8%) by 1.1% from August 26, 2021 to September 27, 2021. On Based on total return, the Model Portfolio (-1.5%) underperformed the S&P 500 (-0.5%) by 1.0% over the same period. The best performing stock rose 6%. Overall, 12 of 30 dividend growth stocks outperformed the S&P 500 from August 26, 2021 to September 27, 2021.

The methodology of this model portfolio mimics an All Cap Blend style with an emphasis on dividend growth. The selected stocks achieve an attractive or very attractive rating, generate free cash flow (FCF) and positive economic earnings, offer a current dividend yield> 1% and have a history of more than 5 years of consecutive dividend growth. This model portfolio is designed for investors who focus more on long-term capital appreciation than current income, but still appreciate the power of dividends, especially growing dividends.

Featured Stock From September: Kearny Financial Corp

Kearny Financial Corp (KRNY) is the flagship stock in the September Dividend Growth Equity Model Portfolio.

Kearny Financial has increased its revenue by 9% compounded annually and its net operating income after tax (NOPAT) by 18% compounded annually over the past decade. In the longer term, the company has grown NOPAT by 8%, compounded annually since fiscal year 2005. The company’s NOPAT margin increased from 13% in fiscal 2015 to 27% in fiscal year 2021.

Figure 1: NOPAT and Kearny Financial revenues since fiscal 2015

Steady dividend growth supported by the FCF

Kearny Financial increased its regular dividend from $ 0.08 / share in fiscal 2016 to $ 0.35 / share in fiscal 2021, or 34% compounded annually. The current quarterly dividend, when annualized, is equal to $ 0.40 / share and offers a dividend yield of 3.1%.

More importantly, Kearny Financial’s strong Free Cash Flow (FCF) supports the company’s growing dividend payments. Kearny Financial has generated a cumulative $ 313 million (32% of current market cap) in FCF while paying out $ 123 million in dividends from fiscal 2016 to fiscal 2021, according to Figure 2.

Figure 2: Free Cash Flow Versus Regular Dividend Payments

Companies with FCFs that far exceed dividend payouts offer opportunities for higher quality dividend growth because I know the company is generating the cash to support a higher dividend. On the other hand, one cannot trust the dividend of a company where the FCF is lower than the dividend payout over time to increase or even maintain its dividend due to insufficient free cash flow.

KRNY has upside potential

At its current price of $ 13 / share, KRNY has a price to economic book value (PEBV) of 0.6. This ratio means that the market expects Kearny Financial’s NOPAT to permanently decline by 40%. This expectation seems too pessimistic for a company that has grown NOPAT by 8% per year for the past two decades.

Even though Kearny Financial’s NOPAT margin drops to 17% (equal to the 5-year low, from 27% TTM) and the company’s NOPAT only increases by 4% compounded annually for the next decade, the share is worth $ 27 / share today – a 108% on the upside. See the math behind the reverse DCF scenario.

If the company grows NOPAT more in line with historical growth rates, the stock has even more potential. Add Kearny Financial’s 3.1% dividend yield and dividend growth history, and you’ll see why this stock is part of the September Dividend Growth Stock Model Portfolio.

Critical details found in financial documents by my company’s Robo-Analyst technology

Below are details of the adjustments I’m making based on Robo-Analyst’s findings in Kearny Financial’s FY2021 10-K:

Income statement: I made $ 13 million in adjustments with a net effect of eliminating $ 5 million in non-operating expenses (2% of revenue). See all adjustments to Kearny Financial’s income statement here.

Balance sheet: I made $ 159 million of adjustments to calculate invested capital with a net increase of $ 83 million. The most notable adjustment was $ 58 million (5% of reported net assets) in total reserves. See all Kearny Financial balance sheet adjustments here.

Valuation: I made $ 25 million in shareholder value adjustments, all of which decreased shareholder value. Besides total debt, the most notable adjustment in shareholder value was $ 6 million in underfunded pension plans. This adjustment represents less than 1% of the market value of Kearny Financial. See all Kearny Financial valuation adjustments here.

Disclosure: David Trainer, Kyle Guske II, Alex Sword, and Matt Shuler receive no compensation for writing about a specific action, style, or theme.

]]>
https://astraveloffl.com/kearny-financial-corps-dividend-growth-potential-analysis/feed/ 0
Capital returns at UnitedHealth Group (NYSE: UNH) stalled https://astraveloffl.com/capital-returns-at-unitedhealth-group-nyse-unh-stalled/ https://astraveloffl.com/capital-returns-at-unitedhealth-group-nyse-unh-stalled/#respond Tue, 12 Oct 2021 17:23:25 +0000 https://astraveloffl.com/capital-returns-at-unitedhealth-group-nyse-unh-stalled/ Did you know that certain financial measures can provide clues about a potential multi-bagger? A common approach is to try to find a business with Return on capital employed (ROCE) which increases, in line with growth amount capital employed. If you see this, it usually means it’s a company with a great business model and […]]]>

Did you know that certain financial measures can provide clues about a potential multi-bagger? A common approach is to try to find a business with Return on capital employed (ROCE) which increases, in line with growth amount capital employed. If you see this, it usually means it’s a company with a great business model and plenty of profitable reinvestment opportunities. Therefore, when we briefly examined UnitedHealth Group (NYSE: UNH) Trend ROCE, we were pretty happy with what we saw.

Understanding Return on Capital Employed (ROCE)

Just to clarify if you’re not sure, ROCE is a measure of the pre-tax income (as a percentage) that a business earns on the capital invested in its business. To calculate this metric for UnitedHealth Group, here is the formula:

Return on capital employed = Profit before interest and taxes (EBIT) ÷ (Total assets – Current liabilities)

0.16 = US $ 21 billion ÷ (US $ 210 billion – US $ 77 billion) (Based on the last twelve months up to June 2021).

Therefore, UnitedHealth Group has a ROCE of 16%. In absolute terms, this is a satisfactory performance, but compared to the 12% average for the health sector, it is much better.

Check out our latest review for UnitedHealth Group

crossbreed

In the graph above, we measured UnitedHealth Group’s past ROCE against its past performance, but the future is arguably more important. If you’d like to see what analysts are forecasting for the future, you should check out our free report for UnitedHealth Group.

The ROCE trend

While the returns on capital are good, they haven’t budged much. Over the past five years, ROCE has remained relatively stable at around 16% and the company has deployed 85% additional capital in its operations. Given that 16% is moderate ROCE, it’s good to see that a company can keep reinvesting at these decent rates of return. Over long periods of time, returns like these may not be very exciting, but with consistency, they can be profitable in terms of stock price performance.

In conclusion…

Ultimately, UnitedHealth Group has proven its ability to adequately reinvest capital at good rates of return. And the stock has performed incredibly well with a return of 226% over the past five years, so long-term investors are no doubt delighted with the result. So while the stock may be “more expensive” than it used to be, we believe that the solid fundamentals justify this stock for further research.

If you are interested in learning more about the risks UnitedHealth Group faces, we have discovered 2 warning signs that you need to be aware of.

While UnitedHealth Group doesn’t earn the highest return, check out this free list of companies that generate high returns on equity with strong balance sheets.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.

Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.

]]>
https://astraveloffl.com/capital-returns-at-unitedhealth-group-nyse-unh-stalled/feed/ 0
SilverBow Resources Announces Oil-Weighted Acquisition https://astraveloffl.com/silverbow-resources-announces-oil-weighted-acquisition/ https://astraveloffl.com/silverbow-resources-announces-oil-weighted-acquisition/#respond Mon, 11 Oct 2021 12:00:00 +0000 https://astraveloffl.com/silverbow-resources-announces-oil-weighted-acquisition/ HOUSTON – (COMMERCIAL THREAD) – SilverBow Resources, Inc. (NYSE: SBOW) (“SilverBow” or “the Company”) today announced that it has entered into a definitive agreement to acquire the oil and gas assets of Eagle Ford from two vendors. Highlights of the acquisition: Total purchase price of approximately $ 75 million, consisting of $ 45 million in […]]]>

HOUSTON – (COMMERCIAL THREAD) – SilverBow Resources, Inc. (NYSE: SBOW) (“SilverBow” or “the Company”) today announced that it has entered into a definitive agreement to acquire the oil and gas assets of Eagle Ford from two vendors.

Highlights of the acquisition:

  • Total purchase price of approximately $ 75 million, consisting of $ 45 million in cash and approximately $ 30 million in equity

  • Should be accretive on all key financial indicators

  • 17,000 total net acres in the oil window of La Salle, McMullen, DeWitt and Lavaca counties

  • May 2021 net production of approximately 2,500 barrels of oil equivalent per day, 71% liquids / 46% oil from 111 PDP wells

  • Acquired oil production represents a 30% increase over SilverBow’s current oil production forecast for the year 2021

  • 2021E Adjusted EBITDA of approximately $ 28 million(1)

  • Over 100 net drill locations, adding approximately three years of inventory to SilverBow’s current 1 rig drilling rate

MANAGEMENT’S COMMENTS

Sean Woolverton, CEO of SilverBow, said: “This acquisition significantly increases SilverBow’s oil production and strengthens our efforts to consolidate Eagle Ford and Austin Chalk while maintaining a balanced oil and gas portfolio. This is our third acquisition since early August and the largest to date for SilverBow. This transaction strengthens our inventory with high return rate locations and gives us an option to expand as we plan for 2022 and beyond. Acquisition contributes to Adjusted EBITDA and further reduces our pro forma leverage ratio(2) taking into account the additional cash flow. As we have shown over time, we plan to continue driving our capital efficiency and leading cost structure as these assets are combined with our existing portfolio. ”

Mr Woolverton added, “Today’s announcement is a testament to the tremendous work we have done to assess the opportunities and execute our plan to consolidate in the basin. Additionally, SilverBow again used a mix of cash and stocks to fund the purchase price. The use of equity has allowed us to access a greater set of strategic growth opportunities while aligning our interests with those of surrounding comparable companies and other key stakeholders for accretive and long-term value creation. term. Including the pro forma contribution from our recent acquisitions, SilverBow is targeting a leverage ratio of 1.25x at the end of 2021. We plan to share additional details as part of our third quarter 2021 report in November.

DETAILS OF THE TRANSACTION

The acquisition has an effective date of August 1, 2021 and is expected to be finalized before the end of the year, subject to customary closing conditions. The total purchase price is approximately $ 75 million, consisting of $ 45 million in cash and the greater of (i) approximately 1.35 million common shares of SilverBow based on its price. 30-day volume-weighted average as of October 4, 2021 and (ii) the number of shares equal to $ 25 million divided by the 30-day volume-weighted average price on the first trading day preceding the trading date. fencing. SilverBow intends to fund the cash component and the fees and expenses with cash on hand and borrowings under its revolving credit facility.

ABOUT SILVERBOW RESSOURCES, INC.

SilverBow Resources, Inc. (NYSE: SBOW) is a Houston-based energy company actively engaged in the exploration, development and production of oil and gas in the Eagle Ford and Austin Chalk shales in South Texas. With over 30 years of experience in South Texas, the company has extensive knowledge of the regional reservoirs it operates to assemble a high quality drilling inventory while continually improving its operations to maximize return on investment. . For more information, please visit www.sbow.com. Information on the Company’s website is not part of this release.

FORWARD-LOOKING STATEMENTS

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent the expectations or beliefs of management regarding future events, and it is possible that the results described in this press release will not be achieved. These forward-looking statements are based on current expectations and assumptions and are subject to a number of risks and uncertainties, many of which are beyond our control. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to, risks and uncertainties discussed in the Company’s reports filed with the Securities and Exchange Commission. All forward-looking statements speak only as of the date of this press release. You should not place undue reliance on these forward-looking statements.

(Footnotes)

1 2021E Adjusted EBITDA based on SilverBow management estimates using the NYMEX strip coupon price as of September 30, 2021. As used in this press release, Adjusted EBITDA is calculated as net income (loss) plus (less) depreciation, depletion and amortization, increased asset retirement obligations, interest expense, depreciation of oil and gas properties, net losses (gains) on contracts commodity derivatives, amounts received (paid) for commodity derivative contracts held until settlement, tax expense (benefit) and stock-based compensation expense. A prospective estimate of net income (loss) is not provided with the prospective estimate of Adjusted EBITDA (a non-GAAP measure) because the elements necessary to estimate net income (loss) are not provided. accessible or estimable at the present time without unreasonable effort. Such items could have a material impact on the net income (loss) of the Company.

2 The increase is based on the adjusted EBITDA for the financial leverage ratio for fiscal 2021. The financial leverage ratio is defined as the total long-term debt, before unamortized discounts, divided by the adjusted EBITDA for the ratio. leverage (a non-GAAP measure) for the twelve month period. . Adjusted EBITDA for leverage ratio is calculated as Adjusted EBITDA plus amortization of derivative contracts, in accordance with SilverBow’s debt covenant compliance calculations. Neither Adjusted EBITDA nor Adjusted EBITDA for leverage ratio should be considered a replacement for the comparable GAAP measure.

]]>
https://astraveloffl.com/silverbow-resources-announces-oil-weighted-acquisition/feed/ 0
Investors will want Inter RAO UES (MCX: IRAO) ROCE growth to persist https://astraveloffl.com/investors-will-want-inter-rao-ues-mcx-irao-roce-growth-to-persist/ https://astraveloffl.com/investors-will-want-inter-rao-ues-mcx-irao-roce-growth-to-persist/#respond Sun, 10 Oct 2021 05:03:45 +0000 https://astraveloffl.com/investors-will-want-inter-rao-ues-mcx-irao-roce-growth-to-persist/ What trends should we look for if we are to identify stocks that can multiply in value over the long term? A common approach is to try to find a business with Return on capital employed (ROCE) which increases, in connection with growth amount capital employed. If you see this, it usually means it’s a […]]]>

What trends should we look for if we are to identify stocks that can multiply in value over the long term? A common approach is to try to find a business with Return on capital employed (ROCE) which increases, in connection with growth amount capital employed. If you see this, it usually means it’s a company with a great business model and plenty of profitable reinvestment opportunities. Speaking of which, we have noticed some big changes in Inter RAO UES ‘ (MCX: IRAO) returns on capital, so let’s take a look.

Understanding Return on Capital Employed (ROCE)

If you’ve never worked with ROCE before, it measures the “return” (profit before tax) that a business generates on capital employed in its business. The formula for this calculation on Inter RAO UES is:

Return on capital employed = Profit before interest and taxes (EBIT) ÷ (Total assets – Current liabilities)

0.14 = ₽104b ÷ (₽910b – ₽142b) (Based on the last twelve months up to June 2021).

So, Inter RAO UES has a ROCE of 14%. In absolute terms, this is a satisfactory performance, but compared to the electric utility sector average of 8.5%, it is much better.

See our latest review for Inter RAO UES

MISX: IRAO Return on Capital Employed October 10, 2021

In the graph above, we measured Inter RAO UES ‘past ROCE against its past performance, but the future is arguably more important. If you’d like to see what analysts are forecasting for the future, you should check out our free report for Inter RAO UES.

How are the returns evolving?

Inter RAO UES shows positive trends. Data shows that returns on capital have increased dramatically over the past five years to reach 14%. Basically the business is making more per dollar of capital invested and on top of that 70% more capital is also being used now. Increasing returns on an increasing amount of capital are common among multi-baggers and that is why we are impressed.

Our opinion on the ROCE of Inter RAO UES

Overall, it is great to see that Inter RAO UES is reaping the rewards of past investments and increasing its capital base. And investors seem to expect more of that in the future, as the stock has rewarded shareholders with an 86% return over the past five years. So, given that the stock has proven to have some promising trends, it is worth doing more research on the company to see if these trends are likely to continue.

Inter RAO UES involves risks, we have noticed 2 warning signs (and 1 which makes us a little uncomfortable) we think you should be aware of.

While Inter RAO UES does not currently generate the highest returns, we have compiled a list of companies that currently generate over 25% return on equity. Check it out free list here.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in the mentioned stocks.

Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.

]]>
https://astraveloffl.com/investors-will-want-inter-rao-ues-mcx-irao-roce-growth-to-persist/feed/ 0
5G pushes overcrowded Indonesian telecommunications industry to three major carriers https://astraveloffl.com/5g-pushes-overcrowded-indonesian-telecommunications-industry-to-three-major-carriers/ https://astraveloffl.com/5g-pushes-overcrowded-indonesian-telecommunications-industry-to-three-major-carriers/#respond Fri, 08 Oct 2021 21:24:22 +0000 https://astraveloffl.com/5g-pushes-overcrowded-indonesian-telecommunications-industry-to-three-major-carriers/ (Nikkei Asia) – A wave of consolidation is hitting Indonesia’s overcrowded wireless telecommunications sector, a market that once had seven operators scrambling to position themselves as pressure from 5G investments could reduce the field to just three big players. The stakes are high. Indonesia is the most populous Southeast Asian country and is expected to […]]]>

(Nikkei Asia) – A wave of consolidation is hitting Indonesia’s overcrowded wireless telecommunications sector, a market that once had seven operators scrambling to position themselves as pressure from 5G investments could reduce the field to just three big players.

The stakes are high. Indonesia is the most populous Southeast Asian country and is expected to have one of the world’s largest digital economies with $ 124 billion in 2025, according to data from Google and others, triple that of Last year.

Parent companies Indosat Ooredoo and Hutchison 3 Indonesia agreed last month to merge the two companies, creating a network operator with more than 100 million subscribers. The merger is expected to deliver savings of $ 300 million to $ 400 million per year, according to the companies, most of which will be invested in expanding 5G services.

The deal is a blow to XL Axiata, number 3 of 56 million customers. The Malaysian-majority carrier received approval in August to launch 5G services, but catching up in itself will be an uphill battle.

Indosat Ooredoo, with the first operator Telkomsel, started rolling out 5G services this year. But coverage is only available in the capital Jakarta and a few other cities.

Spending on 5G equipment has fallen behind due to fierce competition in a saturated market. The standard prepaid voice and data plan from the major providers is between 100,000 rupees ($ 7) and 300,000 rupees, which is cheap even considering average salaries in Indonesia.

The rates of return achieved by mobile operators in 2019 fell 5% from a decade earlier, according to the Indonesian Telematics Industry Association. The return on invested capital fell to 1% from 7% over the same period.

These pressures pushed Bakrie Telecom, lower ranked, to withdraw completely from the mobile activity.

Indonesia is not alone when it comes to expensive 5G upgrades. For the Association of Southeast Asian Nations as a whole, a low-cost 5G deployment that upgrades existing 4G infrastructure would require a further $ 13.5 billion in investment through 2025, according to an analysis by AT Kearney, a consulting firm based in the United States. A deployment using standalone 5G base stations, which provide better service, would more than quintuple the expense.

The Indonesian government has little money in its coffers to build telecommunications infrastructure, so the prosecution is left to the companies. Telkomsel, which has 169 million subscribers, will raise funds by listing a subsidiary of telecoms equipment this year.

Indonesian mobile operators have actively sought foreign investment. Indosat, once a state-owned company, sold shares to a Singaporean telecommunications company, and this stake was taken over in 2008 by Ooredoo, a Qatari communications company.

Many observers say the shakeout will continue until there are only three carriers left. Johnny Plate, the Minister of Communication and Information, expressed his anticipation that more mergers will result from the Indosat deal.

In November last year, the government passed a sweeping bill aimed at increasing foreign investment. The legislation contains language to make it easier for telecommunications to combine wireless spectra, which will encourage more merger activity.

This story was first published in Nikkei Asia.

To download our app for getting late-breaking alerts and reading news on the go.

To have our free weekly newsletter must read.

]]>
https://astraveloffl.com/5g-pushes-overcrowded-indonesian-telecommunications-industry-to-three-major-carriers/feed/ 0
Investors will want MasTec’s ROCE growth (NYSE: MTZ) to persist https://astraveloffl.com/investors-will-want-mastecs-roce-growth-nyse-mtz-to-persist/ https://astraveloffl.com/investors-will-want-mastecs-roce-growth-nyse-mtz-to-persist/#respond Thu, 07 Oct 2021 11:26:07 +0000 https://astraveloffl.com/investors-will-want-mastecs-roce-growth-nyse-mtz-to-persist/ What trends should we look for if we are to identify stocks that can multiply in value over the long term? First, we will want to see a to recover on capital employed (ROCE) which increases and, on the other hand, a based capital employed. Put simply, these types of businesses are dialing machines, which […]]]>

What trends should we look for if we are to identify stocks that can multiply in value over the long term? First, we will want to see a to recover on capital employed (ROCE) which increases and, on the other hand, a based capital employed. Put simply, these types of businesses are dialing machines, which means they continually reinvest their profits at ever higher rates of return. So when we looked MasTec (NYSE: MTZ) and its trend of ROCE, we really liked what we saw.

Return on capital employed (ROCE): what is it?

For those who don’t know what ROCE is, it measures the amount of pre-tax profit a business can generate from the capital employed in its business. Analysts use this formula to calculate it for MasTec:

Return on capital employed = Profit before interest and taxes (EBIT) ÷ (Total assets – Current liabilities)

0.12 = US $ 507 million ÷ (US $ 5.9 billion – US $ 1.6 billion) (Based on the last twelve months up to June 2021).

So, MasTec has a ROCE of 12%. In absolute terms, this is a satisfactory performance, but compared to the construction industry average of 9.7%, it is much better.

Check out our latest review for MasTec

NYSE: MTZ Return on Capital Employed October 7, 2021

Above you can see how MasTec’s current ROCE compares to its previous returns on capital, but there is little you can say about the past. If you like, you can view analyst forecasts covering MasTec here for free.

The ROCE trend

The trends that we have noticed at MasTec are rather reassuring. Data shows that returns on capital have increased dramatically over the past five years to reach 12%. Basically the business is making more per dollar of capital invested and on top of that 89% more capital is also being used now. So we’re very inspired by what we see at MasTec through its ability to reinvest capital profitably.

The bottom line

In summary, it is great to see that MasTec can increase returns by systematically reinvesting capital at increasing rates of return, as these are some of the key ingredients in these highly sought after multi-baggers. And a remarkable 194% total return over the past five years tells us that investors are expecting more good things in the future. Therefore, we believe it would be worth checking whether these trends will continue.

One more thing to note, we have identified 1 warning sign with MasTec and understanding this should be part of your investment process.

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

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.

Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.

]]>
https://astraveloffl.com/investors-will-want-mastecs-roce-growth-nyse-mtz-to-persist/feed/ 0