UEM Edgenta Berhad, a company listed on the KLSE, is showing signs that it may be past its growth phase. Despite the stock price, the underlying trends of declining return on capital employed (ROCE) and a decreasing amount of capital employed are concerning indicators.
ROCE is a key metric used to evaluate how efficiently a company is utilizing its capital to generate profits. In the case of UEM Edgenta Berhad, the ROCE stands at 5.0%, which is lower than the industry average of 6.6%. This suggests that the company is earning less per dollar invested compared to its peers.
Looking at the trend of ROCE over the past five years, UEM Edgenta Berhad’s performance has been on a decline. Five years ago, the ROCE was at 8.5%, indicating a noticeable drop in efficiency since then. Additionally, the amount of capital employed has remained relatively stable, signaling that the company may be facing pressure on its margins from competition.
Long-term shareholders of UEM Edgenta Berhad have experienced a 60% depreciation in their investment, reflecting the market’s dissatisfaction with the company’s performance. With these concerning trends in mind, investors may want to consider alternative investment opportunities.
In conclusion, the declining ROCE and stagnant capital employed at UEM Edgenta Berhad are red flags that the company may not be a strong contender for future growth. Investors are advised to conduct further research and consider other options before making investment decisions.