STOCK INTRINSIC VALUE ANALYSIS WITH PRICE BOOK VALUE (PBV) AND PRICE SALES RATIO (PSR) VALUATION

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