Generac Holdings’ ROCE dwindles, stock still delivers 87% return

In the latest financial analysis, Generac Holdings (NYSE:)’ Return on Capital Employed (ROCE) was calculated at 8.1% as of Today, falling short of the Electrical industry average of 14%. Over the past five years, the company’s ROCE has been on a downward trajectory, declining from an initial high of 19%. Despite this decline and a decrease in revenue, Generac’s stock has managed to deliver an 87% return during this period.

Simultaneously, Designer Brands (NYSE:NYSE:) is grappling with financial challenges. The company’s ROCE stands at 10% as of Today, matching the Specialty Retail industry average but revealing a downward trend from its historical high of 19% five years ago. Despite its reinvestment strategy aimed at expansion and projected future gains, Designer Brands’ current sales growth fails to match its level of investment. This scenario is reflected in the stock’s 55% fall over five years.

Today also saw an analysis of Solo Brands’ (NYSE:DTC) financial metrics. The company’s ROCE stands at a modest 4.8% as of September 2023, lagging behind the Leisure industry’s average of 15%. However, Solo Brands has seen a remarkable transition from incurring losses to now producing a return on its capital within three years. The company’s capital utilization has surged by 155%, indicating potential reinvestment opportunities for superior returns.

The hunt for multi-bagger stocks continues with Southern (NYSE:SO), which exhibits a stable ROCE of 4.4% as of Today, mirroring industry averages but reflecting low returns on investments despite a significant capital increase of 27% over five years. This contrasts with an impressive stock gain of 79% during the same period.

Lastly, Valuetronics Holdings’ ROCE as of March 2023 stood at a disappointing 7.9%, falling short of the Electronic industry average of 11%. The company’s ROCE has been on a downward trajectory over the past five years, dwindling from an initial high of 20%. Despite this underperformance, signs of reinvestment are apparent in Valuetronics’ strategy. Although sales figures have remained static over the past year, an increase in capital employed indicates the company’s potential for future growth.

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