When looking for a multi-bagger stock, it’s important to consider certain trends in a business. Two key factors to look for are a growing return on capital employed (ROCE) and an expansion in the company’s amount of capital employed. This shows that the business is reinvesting profits at increasing rates of return. However, when we examined Intel (NASDAQ:INTC), it did not meet all of these criteria.
ROCE is a measure of a company’s yearly pre-tax profit relative to the capital employed in the business. For Intel, the ROCE is 0.4%, which is lower than the Semiconductor industry average of 9.7%. This indicates a low return on capital for Intel.
Looking at the trend of ROCE at Intel, it has decreased from 21% five years ago to 0.4% currently. While the company has increased its capital employed, its sales have not seen much growth in the last 12 months. It may take some time before the investments lead to an increase in earnings.
Overall, Intel is reinvesting funds for growth, but sales have not shown significant improvement. The stock has also fallen 24% in the last five years. With these factors in mind, Intel does not exhibit the characteristics of a multi-bagger stock. Investors may want to consider other options for potential growth.
It’s important to note that this article is based on historical data and analyst forecasts, and does not constitute financial advice. It’s always recommended to conduct thorough research before making investment decisions.