Title: Shenzhen FRD Science & Technology: Analyzing ROCE Trends for Long-Term Investment Potential
In the world of investing, identifying stocks that have the potential to multiply in value over the long term is a key goal for many investors. One important indicator to look at is the Return on Capital Employed (ROCE), which measures a company’s yearly pre-tax profit relative to the capital employed in the business.
When we look at Shenzhen FRD Science & Technology (SZSE:300602) and its ROCE trend, the numbers may not be as promising as investors would hope. With an ROCE of 1.3%, the company underperforms the industry average of 6.4%. Despite an increase in capital employed, the falling trend of ROCE over the past five years raises some concerns.
The company’s recent capital raising may have contributed to the increase in capital employed, but it’s important to note that the full impact of these funds on earnings may not be realized yet. Additionally, the rising ratio of current liabilities to total assets could pose new risks for the business if not managed effectively.
While revenue and capital employed have both seen growth, the stock price has fallen by 13% over the last five years. This discrepancy highlights the importance of delving deeper into the fundamentals of the business to understand the underlying factors driving these trends.
For investors interested in Shenzhen FRD Science & Technology, further research is recommended to uncover potential risks and opportunities. By analyzing additional factors such as valuation, balance sheets, and insider transactions, investors can make more informed decisions about the long-term investment potential of the company.
Overall, while ROCE trends may not be ideal for Shenzhen FRD Science & Technology at the moment, a comprehensive analysis of the company’s fundamentals can provide valuable insights for investors looking to make informed investment decisions.