Reach Resources (ASX:RR1) Is Experiencing Growth In Returns On Capital

Simply Wall St.09-20

There are a few key trends to look for if we want to identify the next multi-bagger. Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an ...

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Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an ...</p>\n\n<a href=\"https://finance.yahoo.com/news/reach-resources-asx-rr1-experiencing-230249576.html\">Source Link</a>\n\n</div>\n","source":"yahoofinance_au","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Reach Resources (ASX:RR1) Is Experiencing Growth In Returns On Capital</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nReach Resources (ASX:RR1) Is Experiencing Growth In Returns On Capital\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-09-20 07:02 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/reach-resources-asx-rr1-experiencing-230249576.html><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>There are a few key trends to look for if we want to identify the next multi-bagger. Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an ...</p>\n\n<a href=\"https://finance.yahoo.com/news/reach-resources-asx-rr1-experiencing-230249576.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":"BK7506","symbol_name":"金矿股","start_time":0,"source_url":"https://finance.yahoo.com/news/reach-resources-asx-rr1-experiencing-230249576.html","article_id":"2468221637","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/UrHBsIrR8XWjKtdqSp2vkw--~B/aD00MzI7dz0xMTk0O2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/simply_wall_st__316/b3b5a2748dbe57dca97087f8af8726d5"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2468221637","pubTimestamp":1726786969,"sourceInfo":{"source_id":"yahoofinance_au","name":"Yahoo Finance AU"},"weMediaInfo":null,"summary":"There are a few key trends to look for if we want to identify the next multi-bagger. Firstly, we'll want to see a proven return on capital employed  that is increasing, and secondly, an expanding base of capital employed. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. So when we looked at Reach Resources  and its trend of ROCE, we really liked what we saw.If you haven't worked with ROCE before, it measures the 'return'  a company generates from capital employed in its business. To calculate this metric for Reach Resources, this is the formula:. Return on Capital Employed = Earnings Before Interest and Tax  ÷ . Therefore, Reach Resources has an ROCE of 13%. In absolute terms, that's a satisfactory return, but compared to the Metals and Mining industry average of 10% it's much better.Historical performance is a great place to start when researching a stock so above you can see the gauge for Reach Resourc","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK7506":"金矿股","EBIT":"Harbor AlphaEdge Small Cap Earners ETF","RR1.AU":"Reach Resources Limited","BK7104":"黄金"},"translate_title":"Reach Resources(ASX：RR1)的资本回报率正在增长","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"EBIT":1,"RR1.AU":1},"content_text":"There are a few key trends to look for if we want to identify the next multi-bagger. Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an expanding base of capital employed. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. So when we looked at Reach Resources (ASX:RR1) and its trend of ROCE, we really liked what we saw. \n What Is Return On Capital Employed (ROCE)? \n If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. To calculate this metric for Reach Resources, this is the formula: \n Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) \n0.13 = AU$1.9m ÷ (AU$15m - AU$339k) (Based on the trailing twelve months to June 2024).\n Therefore, Reach Resources has an ROCE of 13%. In absolute terms, that's a satisfactory return, but compared to the Metals and Mining industry average of 10% it's much better. \n View our latest analysis for Reach Resources \n\n\n\n  ASX:RR1 Return on Capital Employed September 19th 2024\n \n\n Historical performance is a great place to start when researching a stock so above you can see the gauge for Reach Resources' ROCE against it's prior returns. If you're interested in investigating Reach Resources' past further, check out this free graph covering Reach Resources' past earnings, revenue and cash flow. \n What The Trend Of ROCE Can Tell Us \n Reach Resources is displaying some positive trends. Over the last five years, returns on capital employed have risen substantially to 13%. Basically the business is earning more per dollar of capital invested and in addition to that, 817% more capital is being employed now too. The increasing returns on a growing amount of capital is common amongst multi-baggers and that's why we're impressed. \n On a related note, the company's ratio of current liabilities to total assets has decreased to 2.3%, which basically reduces it's funding from the likes of short-term creditors or suppliers. So this improvement in ROCE has come from the business' underlying economics, which is great to see. \n What We Can Learn From Reach Resources' ROCE \n All in all, it's terrific to see that Reach Resources is reaping the rewards from prior investments and is growing its capital base. Astute investors may have an opportunity here because the stock has declined 66% in the last three years. With that in mind, we believe the promising trends warrant this stock for further investigation. \n One final note, you should learn about the   5 warning signs  we've spotted with Reach Resources (including 3 which are a bit unpleasant) . \n While Reach Resources isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets. \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":null,"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":"4.29.1","shortVersion":"4.29.1","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/2468221637"}