FACTORS INFLUENCING SHARE PRICE IN CIGARETTE MANUFACTURING COMPANIES USING REGRESSION ANALYSIS

Abstract

The debate between whether stock investing in cigarette manufacturing companies is going to be a profitable investment in the future or not has been going endless. PT. Wismilak Inti Makmur Tbk., PT. Hanjaya Mandala Sampoerna Tbk., PT. Gudang Garam Tbk. has depreciates up to 25% of its share price in 2019 while PT. Bentoel International Investama Tbk. was quite stable in term of its share price but this company was generating consecutive losses instead of profit which shattered the belief that cigarette manufacturing companies is a safe investment. This research aims to answer that discussion by conducting a fundamental analysis on macroeconomic factors and companies’ situation by seeing the financial ratios. The regression analysis is conducted based on the data from the fundamental analysis to explore the statistically significant variables that affect the share price of each company. The most contributing factor in Wismilak regression model is the exchange rate followed by the current ratio followed by the gross domestic product of tobacco and the least contributing factor in Wismilak regression model is the tobacco price. The most contributing factor in Sampoerna regression model is the tax rate followed by the return on asset ratio and the least contributing factor in Sampoerna regression model is the current ratio. The most contributing factor in Gudang Garam regression model is the interest rate followed by the tobacco price. The most contributing factor in Bentoel regression model is the exchange rate followed by the tobacco tax rate followed by the Repo rate and the least contributing factor in the Bentoel final regression model is the gross domestic product of tobacco. From the fundamental and regression analysis this research concludes that it is best to invest in PT. Hanjaya Mandala Sampoerna Tbk. and PT. Gudang Garam Tbk. while it is best not to invest in PT. Wismilak Inti Makmur Tbk. and to wait for an investment in PT. Bentoel International Investama Tbk.