Abstract:
Purpose
This research aims to determine the value of the stock and the stock value position
(overvalued, undervalued, or fairvalued) of the coal mining sector companies
registered in the LQ45 Stock Index period August 2018 - January 2019.
Design/methodology/approach
Descriptive research using a quantitative approach is the type of research used in
this study. Using the method of assessment of Price book value (PBV) and Pricesales ratio (PSR) to be combined into Relative Valuation Method, and provide
investment decisions for investors.
Findings
The result of this research shows the fair price of 5 companies and investment
decisions for investors. PT. Indika Energy Tbk based on PBV approach is in the
overvalued, while based on PSR is undervalued, so it can be conclude to be fair
valued with Relative Valuation Method. Investment decision for investors is to hold
the fair valued shares. While PT. Bukit Asam Tbk, PT. Indo Tambangraya Megah
Tbk, PT. Adaro Energy Tbk, and PT. Medco Energi Internasional Tbk is in the
overvalued both with PBV and PSR approach, so it can be conclude to be
overvalued with Relative Valuation Method. Investment decision for investors is to
sell the overvalued shares.
Originality/Value
Authors believe that this is the first study, which applies Price book value (PBV)
and Price-sales ratio (PSR) analysis methods of the coal mining sector companies
registered in the LQ45 Stock Index period August 2018 - January 2019
