Stock Selection Based On Earnings Growth For Detecting High Returns On Stocks

In this study, stocks with consistently increasing earnings per share were analyzed. The intrinsic value of these selected equities was determined and classified as being over or undervalued. The results of the process showed that investors purchasing those stocks classified as undervalued, whose intrinsic value was above the market price, would have consistently earned above average returns.

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Analisis Fundamental Laporan Keuangan pada PT Unilever Indonesia Tbk (UNVR) terhadap Pengambilan Keputusan Investasi

Jurnal Ilmiah Akuntansi Kesatuan ◽

10.37641/jiakes.v9i3.897 ◽

2021 ◽

Vol 9 (3) ◽

Author(s):

Atikah Laili Mukrimatin

Keyword(s):

Intrinsic Value ◽

Investment Decision ◽

Market Price ◽

Secondary Data ◽

Financial Statements ◽

Financial Indicators ◽

Return On Equity ◽

Earnings Per Share ◽

Price Earnings Ratio ◽

Investment Choices

The purpose of this study was to evaluate investment choices by analyzing PT Unilever Indonesia Tbk's financial statements for the 2016-2020 period using the Price Earnings Ratio (PER) methods. Fundamental analysis was used to determine intrinsic value in the context of an investment decision using financial indicators such as Return on Equity (ROE), Dividend Payout Ratio (DPR), Earnings per Share (EPS), Dividend per Share (DPS), and Price Earnings Ratio (EPS). The data was obtained using secondary data from PT Unilever Indonesia Tbk's annual report for the period 2016-2020. The results of this study suggest that, based on the analysis of the intrinsic value of the Q2 2021 market price, PT Unilever Indonesia Tbk is an undervalued stock, and that investment decisions should be made by purchasing shares.

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Employee Stock Options And Diluted Earnings Per Share

Journal of Business & Economics Research (JBER) ◽

10.19030/jber.v3i11.2828 ◽

2011 ◽

Vol 3 (11) ◽

Author(s):

David T. Doran

Keyword(s):

Stock Price ◽

Stock Options ◽

Intrinsic Value ◽

Market Price ◽

Fair Value ◽

Employee Stock Options ◽

Research Support ◽

Earnings Per Share ◽

Free Environment ◽

Period Model

At the time of this writing, SFAS No.123 (1995) prescribes GAAP in accounting for employee stock options. It allows firms to choose either the intrinsic or fair value method in determining the amount of compensation expense recognized for employee stock options. The choice of method affects the numerator of the earnings per share (EPS) calculation. The FASB recently issued a revised SFAS No. 123 (2004) which will require uniform application of the fair value method. GAAP also requires that the denominator for the diluted EPS calculation be increased for incremental shares under the treasury stock method. SFAS 128 requires the treasury stock method be applied where the proceeds from the assumed exercise of options are used to acquire shares of the firm’s outstanding stock at the average market price for the period. Previous to SFAS No. 128, APB Opinion No. 15 required that the higher of average or period ending stock price be used in determining the number of shares reacquired with the proceeds from the assumed exercise of stock options. This paper develops a simple one period model that assumes a risk free environment with complete certainty conditions in testing the accuracy of EPS calculated under GAAP using the fair value method vs. the intrinsic value method. The results indicate that EPS reported under the intrinsic value method are overstated, and further indicate that a combination of both the fair value method and the treasury stock method is needed in calculating diluted EPS. This fair value and treasury stock method combination is shown to not “double count” the stock option’s impact upon EPS. The results also indicate a slight misstatement of diluted EPS under the fair value method when applying the treasury stock method requirements of SFAS No. 128. Correct EPS results when shares are assumed reacquired for the treasury at the higher year ending price, consistent with superseded APB 15. However, the diluted EPS misstatement is so slight that the FASB’s rationale for always requiring the use of average period price seems likely to be justified. The findings of this research support the requirements of SFAS No. 123 (revised 2004) and SFAS No. 128.

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Value Investing - Essence And Ways Of Finding Undervalued Assets

International conference KNOWLEDGE-BASED ORGANIZATION ◽

10.1515/kbo-2015-0057 ◽

2015 ◽

Vol 21 (2) ◽

pp. 344-348 ◽

Cited By ~ 1

Author(s):

Elitsa Petrova

Keyword(s):

Intrinsic Value ◽

Market Price ◽

Efficient Market Hypothesis ◽

Efficient Market ◽

Value Investing ◽

True Value ◽

Short Period ◽

Margin Of Safety ◽

The Difference ◽

Investing Value

Abstract Efficient market hypothesis considers that because many talented analysts constantly searching the market for the deals in a short period, after a certain point of time there are not so attractive deals. According to the hypothesis, successful investors owe their success more to luck than to their skills. The paper presents the Value investing. Value investing is an investment paradigm, which stems from the ideas of Benjamin Graham and David Dodd. The proponents, including the chairperson of Berkshire Hathaway Warren Buffett, argue that the essence of value investing is to buy shares at a price lower than their true value. The difference between the market price and intrinsic value of the stock Graham called the “margin of safety”.

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Earnings, Cash Flows, and Ex Post Intrinsic Value of Equity

The Accounting Review ◽

10.2308/accr.2007.82.2.457 ◽

2007 ◽

Vol 82 (2) ◽

pp. 457-481 ◽

Cited By ~ 55

Author(s):

K. R. Subramanyam ◽

Mohan Venkatachalam

Keyword(s):

Stock Returns ◽

Intrinsic Value ◽

Market Price ◽

Cash Flows ◽

Cost Of Equity ◽

Operating Cash Flows ◽

Ex Post ◽

Reported Earnings ◽

Future Cash Flows ◽

Value Measure

We reexamine the relative importance of earnings and operating cash flows in equity valuation. In contrast to previous studies that use stock returns (Dechow 1994) or future operating cash flows (Barth et al. 2001), we use ex post intrinsic value of equity as the criterion for comparison. We determine ex post intrinsic value of equity by discounting future dividends over a three-year horizon and market price at the end of the horizon by industry cost of equity. The advantage of the ex post intrinsic value measure over stock returns is that it is not contaminated by the stock market's fixation on reported earnings (Sloan 1996). Also, unlike finite horizon future operating cash flows, ex post intrinsic values better reflect the magnitude, timing, and uncertainty of investors' future cash flows (SFAC No. 1, FASB 1978). Our results suggest that accrualbased earnings dominate operating cash flows as a summary indicator of ex post intrinsic value.

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A Note On Accounting For Employee Stock Options When Reporting Diluted Earnings Per Share Under The Treasury Stock Method

Journal of Business & Economics Research (JBER) ◽

10.19030/jber.v6i10.2477 ◽

2011 ◽

Vol 6 (10) ◽

Author(s):

David T. Doran

Keyword(s):

Stock Options ◽

A Priori ◽

Market Price ◽

Accounting Standards ◽

Fair Value ◽

Financial Accounting ◽

Employee Stock Options ◽

Financial Accounting Standards Board ◽

Earnings Per Share ◽

Free Environment

Firms must currently apply the fair value method in determining the amount of employee compensation incurred in the case of employee stock options.  Current GAAP also requires that for purposes of calculating diluted earnings per share (EPS), the treasury stock method be applied where the assumed proceeds from exercise of the optioned shares is used to purchase shares of the firm’s stock at its average market price of the earnings period.  These incremental shares increase the denominator for purposes of calculating diluted EPS.  These requirements are consistent across the pronouncements of the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB).  This study extends the work of Doran (2005) and Doran (2008).  These previous studies found that applying the treasury stock method where shares are assumed purchased at the average for the period price (instead of end of year price) understates the number of incremental shares (the denominator), which overstates diluted EPS.  However, these previous works assumed that no shares were actually purchased for the treasury during the earnings period.  The FASB indicates one reason that the average for the period price is appropriate is because if treasury shares purchases were to occur, “the shares would be purchased at various prices, not at the price at the end of the period.”  This study tests the notion that the average for the period price is appropriate under circumstances where the firm actually purchases shares for the treasury at its average market price during the earnings period.  This paper employs a simple one period model that assumes a risk free environment with complete certainty.  The model allows comparison of computed EPS with an a priori known, correct amount.  Consistent with Doran (2005) and Doran (2008), the results here again indicate that assuming purchase of treasury shares at their average market price of the earnings period understates the EPS denominator which results in EPS overstatement.  Correct diluted EPS is derived when the shares assumed purchased under the treasury stock method are acquired at the higher period ending market price.

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PENGARUH KEBIJAKAN DIVIDEN TERHADAP KEKAYAAN PEMEGANG SAHAM PADA PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BURSA EFEK INDONESIA

PENELITIAN DAN KARYA ILMIAH ◽

10.25105/pdk.v1i2.1459 ◽

2017 ◽

Vol 1 (2) ◽

Author(s):

Bayu Malindo Putra ◽

Henny Setyo Lestari

Keyword(s):

Multiple Regression ◽

Stock Exchange ◽

Market Price ◽

Sampling Technique ◽

Positive Influence ◽

Manufacturing Companies ◽

Return On Equity ◽

Earnings Per Share ◽

Independent Variable ◽

Retained Earnings

This study discusses the effect of the dividend per share, retained earnings per share, return on equity, and lagged price per share to the market price per share on manufacturing companies listed in Indonesia Stock Exchange (IDX). The sampling technique used in this research is purposive sampling. Samples are 33 companies listed in the Indonesia Stock Exchange (IDX) for five years from 2010 to 2014. The dependent variable in this study is the market price per share, while the independent variable is the dividend per share, retained earnings per share, return on equity, and lagged price per share. The method used in this research is multiple regression. The results show that there are positive influence between the dividend per share, retained earnings per share, return on equity and lagged price per share to the market price per share.

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IMPACT OF EPS ON MARKET PRICES AND MARKET RATIO

Business and Entrepreneurial Review ◽

10.25105/ber.v15i2.4629 ◽

2019 ◽

Vol 15 (2) ◽

pp. 111

Author(s):

Febria Nalurita

Keyword(s):

Positive Relationship ◽

Market Price ◽

Security Market ◽

Reference Period ◽

Real Estate Industry ◽

Market Prices ◽

Book Value ◽

Earnings Per Share ◽

The One ◽

The Impact

In this paper the researchers have made an attempt to examine the impact of Earnings Per Share on the MarketPrices, Price-Earning-Ratio and Price to Book Value. In the study, the researchers have taken into consideration twenty-four companies which represent Property and Real Estate industry. A reference period of seven years has been taken from 2009 to 2015. In order to achieve the objectives of the study, regression data panel has been employed and the findings put forth by the study affirmed that on the one hand there exists a positive relationship between earnings per share and market price of shares and on the other hand earnings per share does not statistically influence the market ratio. We suggest that investors must consider other factors as well as EPS in order to invest in the security market

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Is it Possible to Predict Earnings per Share?

SHS Web of Conferences ◽

10.1051/shsconf/202111502002 ◽

2021 ◽

Vol 115 ◽

pp. 02002

Author(s):

Miroslav Kmeťko ◽

Eduard Hyránek

Keyword(s):

Stock Prices ◽

Negative Mood ◽

Market Price ◽

Share Price ◽

Publicly Traded ◽

Publicly Traded Companies ◽

Earnings Per Share ◽

Market Situation ◽

The Subject ◽

Positive Results

The publication of quarterly results of publicly traded companies can have a significant impact on the valuation of their shares. This is mainly concerned with the valuation of the shares, whether it is correct, and at the same time as a prediction of the overall annual financial results. It In most of the analysed companies, we found that most of the year-on-year changes were negative. It is also not possible to draw a clear conclusion about the linear relationship between the percentage change pf surprises and the change in the market price of shares. It should also be noted that the share price in the monitored days may be affected by the current market situation. What this means in practice is that, despite the positive results and the negative mood, stock prices can end up in negative values. However, this situation was not the subject of our research. Therefore, we used a correlation coefficient for this dependence, which represent the mutual movement.

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UNDER/OVER HARGA PASAR SAHAM BBNI TERHADAP NILAI PERUSAHAAN

Equity ◽

10.34209/equ.v18i2.464 ◽

2019 ◽

Vol 18 (2) ◽

pp. 33

Author(s):

Panubut Simorangkir

Keyword(s):

Stock Price ◽

Intrinsic Value ◽

Market Price ◽

Share Price ◽

Industry Analysis ◽

Top Down ◽

Basic Assumptions ◽

Macroeconomic Analysis ◽

Closing Price

This study was conducted to determine whether the company's performance BBNI reflected in the market price of its shares. An assessment of the share price calculated by the method BBNI Discounted Earnings Approach. The approach used is the analysis of top-down where the approach begins with a macroeconomic analysis, industry analysis and then proceed with the analysis of the company, analysis of financial projections for the next few years and then analyzes the determination of the intrinsic value of the company with a variety of basic assumptions gained through the process of collecting the data secondary. Based on the results of the calculation of the valuation by Discounted Earnings Approach at the end of 2014 should BBNI stock price of Rp 6.653, while in reality the closing price at the end of 2014 amounted to Rp 6.100, which means that the undervalued share price. Price estimasian of valuation calculations with Discounted Earnings Approach indicates that BBNI share intrinsic value at the end of 2015 should be in the range of Rp. 8.654

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ANALISIS RASIO KEUANGAN UNTUK MEMPREDIKSI KONDISI FINANCIAL DISTRESS PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BEI

Jurnal Fokus Manajemen Bisnis ◽

10.12928/fokus.v7i2.1744 ◽

2020 ◽

Vol 7 (2) ◽

pp. 156

Author(s):

Sulistyani Sulistyani ◽

Deny Ismanto

Keyword(s):

Financial Distress ◽

Market Price ◽

Financial Ratios ◽

Total Asset ◽

Significant Variable ◽

Net Income ◽

Leverage Ratio ◽

Purposive Sampling ◽

Statistic Method ◽

Earnings Per Share

Financial distress precedes bankruptcy. Most financial distress models actually rely on bankruptcy data, which is easier to obtain. The purpose of this research to examine financial ratios that predict financial distress condition of a firm. The sample of this research consist of 14 distress firm and 79 non-distress firms, chosen by purposive sampling. The statistic method which is used to test on the research hypothesis is logistic regresion. The results show that the liquidity ratio (current assets/current liabilities) and a leverage ratio (current leabilities/total asset) is a significant variable to determine of financial distress firms. When profitability ratio (net income/net sales) and price earning ratio (market price per share/earnings per share) are not significant variables to determine of financial distress.

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