Analysis of Investment Decisions in the Consumer Goods Industry Sector

Oct 13, 2025 by talynt.org 9 views

Analysis of Investment Decisions Based on Stock Price Assessment with the Price Earning Ratio Approach in the Consumer Goods Industrial Sector Sector Listed on the Indonesia Stock Exchange for the 2015-2018 Period

Introduction

The Indonesia Stock Exchange (IDX) is one of the largest stock exchanges in Southeast Asia, with a wide range of companies listed across various sectors. The consumer goods industry sector is a significant contributor to the IDX, with many well-established companies operating in this space. However, with the increasing complexity of the stock market, investors often face challenges in making informed investment decisions. This article aims to provide an analysis of investment decisions in the shares of the consumer goods industry sector listed on the IDX using the Price Earning Ratio (PER) approach.

Understanding the Price Earning Ratio (PER)

The PER is a widely used financial ratio that helps investors assess the stock price of a company. It measures how many times the investor is willing to pay for every rupiah the profit generated by the company. The formula for PER is:

Per = stock price / profit per share (EPS)

For example, if the share price of PT ABC is Rp. 10,000,- and its profit per share is Rp. 1,000, then the PER is 10. This means that investors are willing to pay 10 times the profit per share to buy PT ABC shares.

Factors Influencing the Price Earning Ratio (PER)

The PER is influenced by various factors, including:

*** Company Performance: ** Companies with good performance and bright growth prospects tend to have a higher PER. This is because investors are willing to pay a premium for shares of companies that are expected to perform well in the future. *** Company Risk: ** A high-risk company usually has a lower PER. This is because investors are less willing to pay a high price for shares of companies that are perceived to be riskier. ** Market Conditions: ** Bullish market conditions (optimistic) can increase the PER, while bearish market conditions (pessimistic) can reduce it. This is because investors are more willing to pay a high price for shares in a bullish market. *** Industry: ** Industry with high growth usually has a higher PER industry with low growth. This is because investors are willing to pay a premium for shares of companies in industries that are expected to grow rapidly.

Analysis of Investment Decisions in the Consumer Goods Industry Sector

This study uses a comparative descriptive method to analyze the stock conditions of 52 companies in the consumer goods industry sector listed on the IDX in the 2015-2018 period. The research sample was taken by the purposive sampling technique, resulting in 15 companies selected based on certain criteria. The research data was obtained through the documentation method and analyzed using the PER method.

The results showed that 10 companies, namely PT. Delta Djakarta Tbk, PT Gudang Garam Tbk, PT Handjaya Mandala Sampoerna Tbk, PT. Indofood CBP Sukses Makmur Tbk, PT. Indofood Sukses Makmur Tbk, PT Kino Indonesia Tbk, PT. Kalbe Farma Tbk, PT. Multi Bintang Indonesia Tbk, PT Tempo Scan Pacific Tbk, and PT Unilever Indonesia Tbk, are in Overvalued. This condition means that the stock price has exceeded its intrinsic value, and investors can make the decision to sell shares owned or hold it if it has special reasons to keep holding shares.

Meanwhile, 5 other companies, namely PT Chitose International Tbk, PT. Mayora Indah Tbk, PT Sekar Laut Tbk, PT. Sido herbal medicine and pharmacy industry, and PT Mandom Indonesia Tbk, are in undervalued. This condition means that the stock price is lower than its intrinsic value, and for investors, this condition is an opportunity to buy shares because it is considered to have the potential for future profits.

Conclusion and Recommendations

This study provides an overview of the stock conditions of the consumer goods industry sector in the IDX for the 2015-2018 period based on the PER assessment. The results can help investors in making more appropriate investment decisions by considering the condition of stocks that are Overvalued or undervalued. However, it is essential to note that analysis is only one method of stock assessment, and investors should not rely solely on this method. Further analysis should be carried out by considering various other factors, such as fundamental analysis, technical analysis, and the latest information about related companies and industries.

Limitations of the Study

This study has several limitations, including:

The study only analyzed the stock conditions of 52 companies in the consumer goods industry sector listed on the IDX in the 2015-2018 period.
The study used a comparative descriptive method, which may not capture the complexity of the stock market.
The study relied solely on the PER method, which may not provide a comprehensive view of the stock market.

Future Research Directions

Future research should aim to:

Expand the scope of the study to include more companies and sectors.
Use more advanced methods, such as machine learning and artificial intelligence, to analyze the stock market.
Consider the impact of external factors, such as economic conditions and regulatory changes, on the stock market.

References

[1] Indonesia Stock Exchange. (2019). Annual Report 2018.
[2] Price Earning Ratio. (n.d.). Retrieved from https://www.investopedia.com/terms/p/price-earning-ratio-per.asp
[3] Company Performance. (n.d.). Retrieved from https://www.investopedia.com/terms/c/company-performance.asp
[4] Company Risk. (n.d.). Retrieved from https://www.investopedia.com/terms/c/company-risk.asp
[5] Market Conditions. (n.d.). Retrieved from https://www.investopedia.com/terms/m/market-conditions.asp
[6] Industry. (n.d.). Retrieved from https://www.investopedia.com/terms/i/industry.asp
Frequently Asked Questions (FAQs) About the Price Earning Ratio (PER) Approach

Q: What is the Price Earning Ratio (PER) approach?

A: The PER approach is a widely used financial ratio that helps investors assess the stock price of a company. It measures how many times the investor is willing to pay for every rupiah the profit generated by the company.

Q: How is the PER calculated?

A: The PER is calculated by dividing the stock price by the profit per share (EPS). The formula is:

Per = stock price / profit per share (EPS)

Q: What does the PER indicate?

A: The PER indicates how many times the investor is willing to pay for every rupiah the profit generated by the company. A higher PER indicates that the investor is willing to pay a premium for the company's shares, while a lower PER indicates that the investor is less willing to pay a high price.

Q: What are the factors that influence the PER?

A: The PER is influenced by various factors, including:

*** Company Performance: ** Companies with good performance and bright growth prospects tend to have a higher PER. *** Company Risk: ** A high-risk company usually has a lower PER. ** Market Conditions: ** Bullish market conditions (optimistic) can increase the PER, while bearish market conditions (pessimistic) can reduce it. *** Industry: ** Industry with high growth usually has a higher PER industry with low growth.

Q: What does it mean if a company's PER is high?

A: If a company's PER is high, it means that the investor is willing to pay a premium for the company's shares. This can be a sign of a company with good performance and bright growth prospects.

Q: What does it mean if a company's PER is low?

A: If a company's PER is low, it means that the investor is less willing to pay a high price for the company's shares. This can be a sign of a company with poor performance or high risk.

Q: Can the PER be used to predict a company's future performance?

A: While the PER can provide some insights into a company's future performance, it is not a reliable predictor of future performance. Other factors, such as company fundamentals, industry trends, and market conditions, should also be considered.

Q: How can investors use the PER to make informed investment decisions?

A: Investors can use the PER to compare the stock prices of different companies and make informed investment decisions. For example, if a company's PER is high, it may be a sign of a company with good performance and bright growth prospects, making it a good investment opportunity.

Q: What are the limitations of the PER approach?

A: The PER approach has several limitations, including:

It only provides a snapshot of a company's financial performance at a particular point in time.
It does not take into account other important factors, such as company fundamentals, industry trends, and market conditions.
It can be influenced by various factors, such as accounting practices and market sentiment.

Q: What are some alternative approaches to the PER approach?

A: Some alternative approaches to the PER approach include:

The Price-to-Book (P/B) ratio, which measures the ratio of a company's stock price to its book value.
The Price-to-Sales (P/S) ratio, which measures the ratio of a company's stock price to its sales revenue.
The Dividend Yield, which measures the ratio of a company's dividend payments to its stock price.

Q: How can investors use the PER approach in conjunction with other approaches?

A: Investors can use the PER approach in conjunction with other approaches, such as fundamental analysis, technical analysis, and industry research, to make informed investment decisions. By considering multiple perspectives, investors can gain a more comprehensive understanding of a company's financial performance and make more informed investment decisions.