What are the early trends we should look for to identify a stock that could multiply in value over the long term? Typically, we’ll want to notice a trend of growing return on capital employed (ROCE) and alongside that, an expanding base of capital employed. Ultimately, this demonstrates that it’s a business that is reinvesting profits at increasing rates of return. So on that note, IFCA MSC Berhad (KLSE:IFCAMSC) looks quite promising in regards to its trends of return on capital.
This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.
If you haven’t worked with ROCE before, it measures the ‘return’ (pre-tax profit) a company generates from capital employed in its business. The formula for this calculation on IFCA MSC Berhad is:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets – Current Liabilities)
0.14 = RM18m ÷ (RM154m – RM30m) (Based on the trailing twelve months to June 2025).
Thus, IFCA MSC Berhad has an ROCE of 14%. That’s a relatively normal return on capital, and it’s around the 13% generated by the Software industry.
View our latest analysis for IFCA MSC Berhad
Historical performance is a great place to start when researching a stock so above you can see the gauge for IFCA MSC Berhad’s ROCE against it’s prior returns. If you want to delve into the historical earnings , check out these free graphs detailing revenue and cash flow performance of IFCA MSC Berhad.
IFCA MSC Berhad’s ROCE growth is quite impressive. Looking at the data, we can see that even though capital employed in the business has remained relatively flat, the ROCE generated has risen by 5,779% over the last five years. So our take on this is that the business has increased efficiencies to generate these higher returns, all the while not needing to make any additional investments. The company is doing well in that sense, and it’s worth investigating what the management team has planned for long term growth prospects.
To bring it all together, IFCA MSC Berhad has done well to increase the returns it’s generating from its capital employed. And since the stock has fallen 21% over the last five years, there might be an opportunity here. That being the case, research into the company’s current valuation metrics and future prospects seems fitting.
One more thing, we’ve spotted 3 warning signs facing IFCA MSC Berhad that you might find interesting.