The Motley Fool Singapore
This Small Cap’s Share Price Surged 24% Last Year. Is It a Good Business?
JB Foods Ltd (SGX: BEW) is a food company focusing on the production and sale of cocoa ingredient products, namely, cocoa butter, cocoa powder, cocoa mass and cocoa cake. At its current price of S$0.68, the company’s stock has risen 24% in the last twelve months. This captured my attention and got me interested in finding out more about the company. In particular, I want to understand: Does it have a high-quality business? This question is important. If JB Foods has a high-quality business, its current low share price could be an investment opportunity. Unfortunately, there’s no easy answer to the question. But, a simple metric can help shed some light on the question: the return on invested capital (ROIC). A brief introduction to the ROIC In a previous article of mine, I explained how