We Like These Underlying Return On Capital Trends At Web Media Group AD (BUL:WMG)

If you're looking for a multi-bagger, there's a few things to keep an eye out for. One common approach is to try and find a company with returns on capital employed (ROCE) that are increasing, in conjunction with a growing amount of capital employed. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. So when we looked at Web Media Group AD (BUL:WMG) and its trend of ROCE, we really liked what we saw.

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What Is Return On Capital Employed (ROCE)?

If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. The formula for this calculation on Web Media Group AD is:

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

0.03 = лв1.1m ÷ (лв40m - лв4.1m) (Based on the trailing twelve months to September 2025).

Therefore, Web Media Group AD has an ROCE of 3.0%. Ultimately, that's a low return and it under-performs the Media industry average of 11%.

View our latest analysis for Web Media Group AD

Historical performance is a great place to start when researching a stock so above you can see the gauge for Web Media Group AD's ROCE against it's prior returns. If you're interested in investigating Web Media Group AD's past further, check out this free graph covering Web Media Group AD's past earnings, revenue and cash flow.

What Does the ROCE Trend For Web Media Group AD Tell Us?

Web Media Group AD has recently broken into profitability so their prior investments seem to be paying off. The company was generating losses five years ago, but now it's earning 3.0% which is a sight for sore eyes. And unsurprisingly, like most companies trying to break into the black, Web Media Group AD is utilizing 147% more capital than it was five years ago. This can tell us that the company has plenty of reinvestment opportunities that are able to generate higher returns.

What We Can Learn From Web Media Group AD's ROCE

To the delight of most shareholders, Web Media Group AD has now broken into profitability. And since the stock has fallen 40% over the last five years, there might be an opportunity here. With that in mind, we believe the promising trends warrant this stock for further investigation.

Since virtually every company faces some risks, it's worth knowing what they are, and we've spotted 5 warning signs for Web Media Group AD (of which 4 are a bit concerning!) that you should know about.

For those who like to invest in solid companies, check out this free list of companies with solid balance sheets and high returns on equity.

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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.