ANALYSIS OF STRONG PERFORMANCE LISTED COMPANIES AT UNDERVALUED PRICES AND CORRELATION OF FINANCIAL INDICATORS WITH STOCK PRICE GROWTH DURING THE COVID-19 PANDEMIC IN INDONESIA STOCK EXCHANGE

• Main Author: Jonathan Panjaitan, Kevin
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/75933
• Institution: Institut Teknologi Bandung

The fear of an economic crisis caused by the COVID-19 pandemic in 2020 led to a sharp decline in the IDX composite index on Indonesia Stock Exchange (IDX) to 4.538,93 on March, 31 2020. The massive drop of IDX composite index, undoubtedly resulted in many investors experiencing a significant decrease in their stock portfolio performance in the beginning of COVID-19 pandemic. Nevertheless, on March 31, 2023, three years after the first implementation of the first large-scale social restrictions in Indonesia, the IDX composite index had increased significantly by 49.93% to 6,805.27 due to economic recovery. Considering this significant increase in the IDX composite index, investors who purchased stocks during the beginning of COVID-19 pandemic, have a high probability of obtaining a substantial return by March 31,2023. Therefore, a crisis like COVID-19 pandemic, can also be seen as an opportunity for investors to purchase stocks at lower prices and potentially gain higher returns in the coming years. The objectives of this research are to analyze the listed companies with strong performance and undervalued prices during the COVID-19 pandemic, including their financial performance and growth driver, as well as to analyze the correlation between the chosen financial indicators and stock price growth. The financial indicators used in this study are growth performance, financial ratio performance, and valuation ratio. To determine the financial indicators that have the strongest correlation with the stock price growth, the author uses partial least squares statistical method using SmartPLS 3.0 and calculates the average return of stocks that meet each of financial indicator criteria. This research aims to assist individual and institutional investors in identifying potential winning stocks, particularly during economic crisis occurs and to increase the level of capital market financial literacy in Indonesia. This study concludes that growth performance had the strongest correlation with stock price growth during COVID-19 Pandemic. Nevertheless, companies having strong growth performance, strong financial ratio performance and undervalued prices yielded even higher average returns, reaching by 956.6%. Additionally, there were six listed companies that had strong growth performance, strong financial ratio performance and undervalued prices during COVID-19 pandemic, which are ADES, ADRO, ITMG, MBAP, PSSI, and TMAS.