ZIM Integrated Shipping Services, a company that has been reinvesting its earnings at an increasing rate, is demonstrating a promising growth trend through the expansion of its return on capital employed (ROCE) and capital base. These factors are pivotal for long-term stock value multiplication.
The company's pre-tax profits, calculated as ROCE for the trailing twelve months to June 2023, stands at an impressive 23%. This figure is derived from an EBIT of US$1.9 billion and total assets of US$11 billion, less current liabilities of US$2.4 billion. This significantly exceeds the industry average of 10%.
Over the past five years, ZIM has substantially increased its ROCE. This improvement has led to higher returns per invested dollar and a remarkable 723% increase in capital employed. Analysts have confirmed this positive outlook for the company's future growth.
ZIM Integrated Shipping Services' financial strategies appear to be paying off, as indicated by its robust ROCE and capital base expansion. The company's encouraging performance highlights its potential for long-term stock value multiplication, making it a noteworthy player in the industry.
InvestingPro Insights
In line with the article's focus on ZIM Integrated Shipping Services' promising growth trend, let's delve into some real-time data and tips from InvestingPro.
From InvestingPro's data, ZIM's market capitalization stands at an adjusted $985.79 million. The company has a low Price/Earnings (P/E) ratio of 0.75, and a P/E ratio adjusted for the last twelve months as of Q2 2023 of 0.8. These metrics suggest that the company's stock may be undervalued. Additionally, the company's return on assets for the last twelve months as of Q2 2023 stands at 11.83%, reinforcing the article's point about the company's high return on capital employed.
InvestingPro Tips reveal that ZIM operates with high earnings quality, with free cash flow exceeding net income, and trades at a low Price/Book multiple. This suggests that the company is efficiently generating profits and may be undervalued, respectively. However, it's important to note that the stock price movements of ZIM are quite volatile, which potential investors should consider.
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