Undervalue and Overvalue Research Papers (original) (raw)

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The development of the world capital market and especially in Indonesia from the beginning of 2020 is very gloomy. It happened because since the end of December 2019 the Covid-19 pandemic occurred which caused panic among capital market... more

The development of the world capital market and especially in Indonesia from the beginning of 2020 is very gloomy. It happened because since the end of December 2019 the Covid-19 pandemic occurred which caused panic among capital market players so that the Composite Stock Price Index (JCI) until at the end of March 2020 had fallen by -36.67%. There was a correction of -38,04% for the average share price of 669 issuers. Conditions like this for long-term investors will be an opportunity to buy up shares, while short-term investors or speculators leave the market. The calculation of the intrinsic value of shares in this study uses the Dividend Discount Model (DDM). It will take a sample of 49 companies that distributed dividends regularly during the period 2014 - 2019 and have never suffered a loss. Based on the research results, we can see that there are 42 companies (86%) that are in an undervalued condition, and only seven companies are overvalued (14%). Meanwhile, seen from the Margin of Safety (MOS) using the market price basis as of September 30, 2020, 35 companies are worth buying because their MOS is above 30% and seven companies have MOS less than 30%. Furthermore, from 35 companies that are eligible to be purchased, there are seven companies, namely HMSP, AALI, ASCII, BMRI, BBRI, ITMG and PTBA.

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  • Mos, Intrinsic Value, Ddm, Undervalue and Overvalue