Investors Will Want Hartshead Resources' (ASX:HHR) Growth In ROCE To Persist

Simply Wall St.08-25

Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key financial metrics. Amongst other things, we'll want to see two things; firstly, ...

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Amongst other things, we'll want to see two things; firstly, ...</p>\n\n<a href=\"https://finance.yahoo.com/news/investors-want-hartshead-resources-asx-230734715.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"HHR.AU","symbol_name":"Hartshead Resources NL","start_time":0,"source_url":"https://finance.yahoo.com/news/investors-want-hartshead-resources-asx-230734715.html","article_id":"2462691327","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/zbingGm8u8WvxKzb7gFJEQ--~B/aD00MzI7dz0xMTk0O2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/simply_wall_st__316/fef15a04bcb8e7f05d317d73670619f7"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2462691327","pubTimestamp":1724540854,"columns":[],"sourceInfo":{"source_id":"yahoofinance_au","name":"Yahoo Finance AU"},"weMediaInfo":null,"summary":"Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key financial metrics. Amongst other things, we'll want to see two things; firstly, a growing return on capital employed  and secondly, an expansion in the company's amount of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. So on that note, Hartshead Resources  looks quite promising in regards to its trends of return on capital.Return On Capital Employed : What Is It?Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income  a company earns on the capital invested in its business. The formula for this calculation on Hartshead Resources is:. Return on Capital Employed = Earnings Before Interest and Tax  ÷ . Therefore, Hartshead Resources has an ROCE of 7.1%. Even though it's in line with the industry average of 6.8%, it's still a low return by itself.Check out ou","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"HHR.AU":"Hartshead Resources NL","EBIT":"Harbor AlphaEdge Small Cap Earners ETF","BK7142":"石油与天然气的勘探与生产","BK4130":"人力资源与就业服务","HHR":"Headhunter Group PLC","BK4211":"区域性银行","ISBC":"投资者银行"},"translate_title":"投资者希望Hartshead Resources(ASX：HHR)的ROCE增长持续下去","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"EBIT":1,"HHR":1,"HHR.AU":1,"ISBC":1},"content_text":"Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key financial metrics. 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. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. So on that note, Hartshead Resources (ASX:HHR) looks quite promising in regards to its trends of return on capital. \n Return On Capital Employed (ROCE): What Is It? \n 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 Hartshead Resources is: \n Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) \n0.071 = AU$2.4m ÷ (AU$41m - AU$7.0m) (Based on the trailing twelve months to December 2023).\n Therefore, Hartshead Resources has an ROCE of 7.1%. Even though it's in line with the industry average of 6.8%, it's still a low return by itself. \n Check out our latest analysis for Hartshead Resources \n\n\n\n  ASX:HHR Return on Capital Employed August 24th 2024\n \n\n In the above chart we have measured Hartshead Resources' prior ROCE against its prior performance, but the future is arguably more important. If you'd like, you can check out the forecasts from the analysts covering Hartshead Resources  for free. \n The Trend Of ROCE \n We're delighted to see that Hartshead Resources is reaping rewards from its investments and is now generating some pre-tax profits. Shareholders would no doubt be pleased with this because the business was loss-making three years ago but is is now generating 7.1% on its capital. In addition to that, Hartshead Resources is employing 866% more capital than previously which is expected of a company that's trying to break into profitability. This can indicate that there's plenty of opportunities to invest capital internally and at ever higher rates, both common traits of a multi-bagger. \n In Conclusion... \n Overall, Hartshead Resources gets a big tick from us thanks in most part to the fact that it is now profitable and is reinvesting in its business. Given the stock has declined 70% in the last three years, 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. \n One more thing: We've identified   3 warning signs  with Hartshead Resources (at least 2 which don't sit too well with us)  , and understanding them would certainly be useful. \n While Hartshead Resources 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. \nHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2462691327"}