Yield trends at OpenSys (M) Berhad (KLSE: OPENSYS) look promising

What trends should we look for? Want to identify stocks that can double in value over the long term? Normally, we’ll want to note the growth trend return on capital employed (ROCE) and besides, expansion Base of working capital. Essentially, this means that the company has profitable initiatives that it can continue to reinvest in, which is a feature of a compounding machine. Speaking of which, we’ve noticed some big changes in OpenSys (M) Berhad (KLSE: OPENSYS) is back on capital, so let’s take a look.

Return on Capital Employed (ROCE): What is it?

If you haven’t worked with ROCE before, it measures the “return” (pre-tax profit) that a company earns on the capital used in its business. The formula for this account on OpenSys (M) Berhad is:

Return on Capital Employed = EBIT ÷ (Total Assets – Current Liabilities)

0.18 = RM16m ÷ (RM111 m – RM21 m) (Based on subsequent twelve months through September 2022).

So, OpenSys (M) Berhad has a stake of 18%. That’s a record return in itself, but much better than the 9.2% generated by the tech industry.

View our latest analysis for OpenSys(M) Berhad

year

While the past does not represent the future, it can be helpful to know how the company has performed historically, which is why we have this chart above. If you’d like to look at OpenSys(M) Berhad’s past performance in other metrics, you can view this Free Graph of past profits, revenues and cash flows.

Russia direction

OpenSys(M) Berhad is showing some positive trends. Figures show that in the past five years, returns on capital employed have grown exponentially to 18%. The company actually makes more money per dollar of capital employed, and it’s worth noting that the amount of capital has also increased by 40%. Increased returns on an increased amount of capital is common among multi-packers which is why we like it.

What we can learn from OpenSys(M) Berhad’s ROCE

A company that maximizes returns on capital and can continually reinvest in itself is a highly sought after trait, and this is what OpenSys (M) Berhad possesses. Since the stock has performed exceptionally well over the past five years, these patterns have been accounted for by investors. So, we think it’s worth your time to check if these trends will continue.

On a final note, we found Two warning signs for OpenSys(M) Berhad Which we think you should be aware of.

If you want to look for solid companies with big profits, check this out Free List of companies with healthy balance sheets and impressive returns on equity.

Do you have feedback on this article? Worried about the content? keep in touch directly with us. Alternatively, email the editorial team (at) simplewallst.com.

This article written by Simply Wall St is general in nature. We provide comments based on historical data and analyst predictions 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 it does not take into account your objectives or financial situation. We aim to provide you with focused, long-term analysis driven by fundamental data. Note that our analysis may not include the company’s most recent price-sensitive announcements or specific materials. Wall Street simply has no position in any of the stocks mentioned.

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