To The Moon

Singapore Airlines (SIA) saw its stock price plummet by 3.01% in pre-market trading on Friday, following the release of its disappointing first-half financial results. The national carrier reported a...

The airline has seen its share price tumble following a weak set of earnings.

There are a few key trends to look for if we want to identify the next multi-bagger. Firstly, we'll want to see a proven return on capital employed that is increasing, and secondly, an expanding base of capital employed. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. With that in mind, we've noticed some promising trends at Singapore Airlines so let's look a bit deeper.Return On Capital Employed : What Is It?If you haven't worked with ROCE before, it measures the 'return' a company generates from capital employed in its business. The formula for this calculation on Singapore Airlines is:. Return on Capital Employed = Earnings Before Interest and Tax ÷ . So, Singapore Airlines has an ROCE of 7.0%. On its own, that's a low figure but it's around the 8.0% average generated by the Airlines industry.