Did you know there are some financial metrics that can provide clues of a potential multi-bagger? Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. Although, when we looked at Loma Negra Compañía Industrial Argentina Sociedad Anónima (NYSE:LOMA), it didn't seem to tick all of these boxes.

We check all companies for important risks. See what we found for Loma Negra Compañía Industrial Argentina Sociedad Anónima in our free report.

What Is Return On Capital Employed (ROCE)?

Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. To calculate this metric for Loma Negra Compañía Industrial Argentina Sociedad Anónima, this is the formula:

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

0.091 = AR$109b ÷ (AR$1.6t - AR$357b) (Based on the trailing twelve months to March 2025).

Thus, Loma Negra Compañía Industrial Argentina Sociedad Anónima has an ROCE of 9.1%.  In absolute terms, that's a low return and it also under-performs the Basic Materials industry average of 14%.

View our latest analysis for Loma Negra Compañía Industrial Argentina Sociedad Anónima NYSE:LOMA Return on Capital Employed May 11th 2025

In the above chart we have measured Loma Negra Compañía Industrial Argentina Sociedad Anónima's prior ROCE against its prior performance, but the future is arguably more important. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for Loma Negra Compañía Industrial Argentina Sociedad Anónima .

So How Is Loma Negra Compañía Industrial Argentina Sociedad Anónima's ROCE Trending?

In terms of Loma Negra Compañía Industrial Argentina Sociedad Anónima's historical ROCE movements, the trend isn't fantastic. To be more specific, ROCE has fallen from 19% over the last five years. Although, given both revenue and the amount of assets employed in the business have increased, it could suggest the company is investing in growth, and the extra capital has led to a short-term reduction in ROCE. And if the increased capital generates additional returns, the business, and thus shareholders, will benefit in the long run.

Our Take On Loma Negra Compañía Industrial Argentina Sociedad Anónima's ROCE

Even though returns on capital have fallen in the short term, we find it promising that revenue and capital employed have both increased for Loma Negra Compañía Industrial Argentina Sociedad Anónima. And the stock has done incredibly well with a 340% return over the last five years, so long term investors are no doubt ecstatic with that result. So while the underlying trends could already be accounted for by investors, we still think this stock is worth looking into further.

Story Continues

While Loma Negra Compañía Industrial Argentina Sociedad Anónima doesn't shine too bright in this respect, it's still worth seeing if the company is trading at attractive prices. You can find that out with our  FREE intrinsic value estimation for LOMA on our platform.

While Loma Negra Compañía Industrial Argentina Sociedad Anónima isn't earning the highest return, check out this freelist of companies that are earning high returns on equity with solid balance sheets.

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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.

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