Tired of chasing hype stocks? Discover why real investors track ROE & ROCE to build wealth — not just luck.

by | Mar 24, 2025 | Investing Strategies | 0 comments

Introduction

If you’re tired of chasing hype stocks and missing real gains, this might change how you invest forever.

When assessing a company’s performance, two financial ratios stand out: ROE (Return on Equity) and ROCE (Return on Capital Employed).

💡 ROE measures profitability for shareholders. The higher it is, the more efficiently the company is using its equity capital.

💼 ROCE, on the other hand, evaluates the profitability of all capital employed, including debt and equity. It’s a more comprehensive metric, ideal for assessing a business model’s overall efficiency.

Why should you track them?

  • An ROE above 15% often indicates a fast-growing company.
  • ROCE above 12% combined with low debt usually points to a strong and sustainable competitive advantage (moat).

📉 Caution: A high ROE fueled by excessive leverage can be misleading. That’s why using both ratios together is essential for accurate analysis.

🏆 Smart investors combine these two indicators to:

  • Identify high-quality companies
  • Avoid yield traps
  • Anticipate future market moves

🧠 Combine these ratios with our sector-based screening tool on Power BI to build your own GARP or Quality investing portfolio.

👉 If you are (still) not a paid subscriber, access our exclusive premium high-quality stock lists at Bullishstockalerts.com


Why Our Members Stay for Years

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📈 +29% Compound annual growth rate (CAGR)
📊 +56% absolute return in just 18 months

Past performance is no guarantee of future results, but we have confidence in our approach, and our subscribers agree.


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