There are a few key trends to look for if we want to identify the next multi-bagger. 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 when we looked at Atlantic Navigation Holdings (Singapore) (Catalist:5UL) and its trend of ROCE, we really liked what we saw.

For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. The formula for this calculation on Atlantic Navigation Holdings (Singapore) is:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)

0.18 = US$27m ÷ (US$197m - US$46m) (Based on the trailing twelve months to June 2024).

So, Atlantic Navigation Holdings (Singapore) has an ROCE of 18%. In absolute terms, that's a satisfactory return, but compared to the Energy Services industry average of 11% it's much better.

Check out our latest analysis for Atlantic Navigation Holdings (Singapore)

While the past is not representative of the future, it can be helpful to know how a company has performed historically, which is why we have this chart above. If you'd like to look at how Atlantic Navigation Holdings (Singapore) has performed in the past in other metrics, you can view this free graph of Atlantic Navigation Holdings (Singapore)'s past earnings, revenue and cash flow.

Atlantic Navigation Holdings (Singapore) is showing promise given that its ROCE is trending up and to the right. 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 181% 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. On that front, things are looking good so it's worth exploring what management has said about growth plans going forward.

To sum it up, Atlantic Navigation Holdings (Singapore) is collecting higher returns from the same amount of capital, and that's impressive. And with the stock having performed exceptionally well over the last five years, these patterns are being accounted for by investors. With that being said, we still think the promising fundamentals mean the company deserves some further due diligence.