What are the underlying tendencies we should search for in a stock that has the potential to grow over time? In an ideal scenario, a firm would increase the capital it invests in its operations and, perhaps, see an increase in the returns on that capital. This usually indicates that the organisation has a strong business plan and lots of room for lucrative reinvestment. Let’s take a look at the patterns that Keysight Technologies (NYSE:KEYS) is showing us in light of this. They seem really encouraging.
At Keysight Technologies, we’ve discovered several tendencies that are rather comforting. According to the data, returns on capital have climbed to 20% during the previous five years, a significant gain. In essence, the company is making more money for every dollar of capital spent, and on top of that, 52% more capital is being used at this time. This may suggest that there are several chances to make internal capital investments at steadily rising rates—a combination that multi-baggers frequently have.
Keysight Technologies is one of those highly sought-after companies that can constantly reinvest in itself and improve its returns on capital. Investors are accounting for these tendencies since the stock has fared remarkably well over the past five years. As such, we believe it would be worthwhile for you to investigate if these patterns are likely to persist.