Saudi Journal of Business and Management Studies (SJBMS)
Volume-3 | Issue-12 | 1274-1284
Original Research Article
The Fair Share Price That Has the Largest Market Capitalization Empirical Studies of Sectors Related to Indonesian National Logistics System Policy
Andi Desfiandi, Abshor Marantika
Published : Dec. 30, 2018
Abstract
The emitem companies are competing in improving their performance through an offering of stock price progress. Market stock price is the price that occurs in the market at a certain moment determined by market participants. Declining stock price condition indicates the company's position. The decline in investor interest in investment is reflected in the decline in stock prices. This applies also to related companies as well as to national logistics system policies. The objective of this study was to determine the purchase decision, sales decision, and stockholding decision by using an analytical method dividend discounted Model (DDM), price earnings ratio (PER), and price book value (PBV) on companies listed on the national logistics system. Based on the DDM approach, it is known that the average fair stock price is cheaper than the stock market price. This is because the rate of return that is estimated (k) is smaller than the dividend growth (g). If the company gives dividends continues to rise but the stock market price indicates a stable value, then this is not good for the company because it will make the fair value of shares with the method of deviden discounted model get negative results. Based on the PER approach, it is known that the average fair price of shares is more expensive than the stock market price. This is because the measuring instrument above calculates PER by comparing earnings per share. After that the results are multiplied by the expected EPS. Based on PBV approach Average stock fair price > 1, so that the valuation of fair price of shares is worth overvalued. This is because the measuring instrument for calculating the fair value of the stock using the price book value method takes the value of the total equity.
Keywords: Stock price, dividend discounted, price earnings, price book