Bet Shemesh Engines Holdings (1997) (TLV:BSEN) Is Achieving High Returns On Its Capital

If you're not sure where to start when looking for the next multi-bagger, there are a few key trends you should 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. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. Speaking of which, we noticed some great changes in Bet Shemesh Engines Holdings (1997)'s (TLV:BSEN) returns on capital, so let's have a look.

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Understanding Return On Capital Employed (ROCE)

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. Analysts use this formula to calculate it for Bet Shemesh Engines Holdings (1997):

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

0.21 = US$55m ÷ (US$421m - US$154m) (Based on the trailing twelve months to September 2025).

Therefore, Bet Shemesh Engines Holdings (1997) has an ROCE of 21%. While that is an outstanding return, the rest of the Aerospace & Defense industry generates similar returns, on average.

View our latest analysis for Bet Shemesh Engines Holdings (1997)

Historical performance is a great place to start when researching a stock so above you can see the gauge for Bet Shemesh Engines Holdings (1997)'s ROCE against it's prior returns. If you'd like to look at how Bet Shemesh Engines Holdings (1997) has performed in the past in other metrics, you can view this free graph of Bet Shemesh Engines Holdings (1997)'s past earnings, revenue and cash flow.

The Trend Of ROCE

We like the trends that we're seeing from Bet Shemesh Engines Holdings (1997). Over the last five years, returns on capital employed have risen substantially to 21%. The company is effectively making more money per dollar of capital used, and it's worth noting that the amount of capital has increased too, by 36%. This can indicate that there's plenty of opportunities to invest capital internally and at ever higher rates, a combination that's common among multi-baggers.

On a side note, we noticed that the improvement in ROCE appears to be partly fueled by an increase in current liabilities. Effectively this means that suppliers or short-term creditors are now funding 37% of the business, which is more than it was five years ago. Keep an eye out for future increases because when the ratio of current liabilities to total assets gets particularly high, this can introduce some new risks for the business.

In Conclusion...

In summary, it's great to see that Bet Shemesh Engines Holdings (1997) can compound returns by consistently reinvesting capital at increasing rates of return, because these are some of the key ingredients of those highly sought after multi-baggers. Since the stock has returned a staggering 1,210% to shareholders over the last five years, it looks like investors are recognizing these changes. So given the stock has proven it has promising trends, it's worth researching the company further to see if these trends are likely to persist.

If you want to continue researching Bet Shemesh Engines Holdings (1997), you might be interested to know about the 1 warning sign that our analysis has discovered.

High returns are a key ingredient to strong performance, so check out our free list ofstocks 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.