Examination Stock Underperformance Leveraging Financial Ratios, Intrinsic Valuation, and Multiple Market Approach (Case Study: Indonesia Leading MRO Company)
Journal Title: International Journal of Current Science Research and Review - Year 2024, Vol 7, Issue 06
Abstract
AMF a prominent MRO company in Asia-Pacific region, especially Indonesia, has experienced decline in stock performance since its IPO in 2017. This study aims to discover factors contributing in company’s declining value and provide feasible recommendation to improve stock performance and financial health. A ten-year financial report assessment from 2014 to 2023 was conducted to gain a broader overview of company’s financial condition. This study examines financial ratios and compared to industry average through Multiple Market Approach. External risk affecting the underperformance of stock are also evaluated through PESTEL and Porter’s Five Forces. Result of the study indicate underperformance of AMF is due to decreasing profitability margin, inefficient use of assets, increasing operational expenses, and unfavourable external economic condition. The evaluation also reveal that the stock undervalued by market, where this statement is reinforced by intrinsic value of company is 3.88x higher than current market price, as well as supported by comparisons with similar industries where the financial ratios such as P/E ratio, M/B ratio, and EV/EBITDA are below industry average. The analysis proposes stock performance enhancement and financial stability by optimizing operational processes, capitalizing on technological advancement, and establishing strategic partnership to diversify revenue streams and enhance market presence.
Authors and Affiliations
Ryan Salim, Subiakto Sukarno,
Keywords
Related Articles
- EP ID EP738972
- DOI 10.47191/ijcsrr/V7-i6-87
- Views 6
- Downloads 0
Analysis of the Effect of Third Party Funds, Non-Performing Loans, Loan to Deposit Ratio on Lending Before and After Covid-19 with Profitability as a Moderating Variable in Conventional Banks Listed on the Indonesian Stock Exchange for The Period 2017 – 2022
This study aims to analyze the factors that influence lending in banking companies on the Indonesia Stock Exchange, with a focus on third-party funds, non-performing loans, and loan-to-deposit ratios. Profitability is al...
The Bottom-Line Choice: Lease vs. Buy – A Business Owner's Guide
This comprehensive guide navigates businesses through the intricate decision-making process of leasing versus buying, addressing the pivotal capital conundrum they face. The framework begins with a meticulous financial f...
Examining the Distributional Characteristics of Daily Returns of Nifty 50: Normality Assessment and Implications
This paper investigates the distributional characteristics of daily returns of the Nifty 50 index, a benchmark index comprising 50 large-cap stocks traded on the National Stock Exchange of India. Utilizing historical dat...
Prediction of Stock Price Volatility Using the Long Short Term Memory (LSTM) Model for Investment Portfolio Selection Strategy
Volatility is an important variable in financial data models. Predicting volatility in financial data is helpful for investors to make good decisions to reduce risk and to gain investment returns. In predicting volatilit...
Navigating Change to Integrate Employee Perceptions into the Strategic Landscape of Business Split: A Study of PT Jasa Yuwana's Potential Business Split
Organizational change is important for business evolution, as it can impact the business direction and employees’ perceptions. Although intimidating, organizational changes can offer opportunities for growth and advancem...