Value Investing Analysis: A Look at Anthony Salim Portfolio

Abstract

Investors in Indonesia are in search of the market for stocks, including ways and methods suitable for investors’ way of thinking. Value Investing looks for undervalued stocks by carefully analyzing a company’s financial ratios. Past research found evidence that investment in value stocks benefitted the likes of Warren Buffet, Seth Klarman, etc. However, we found a lack of studies that investigates value investing in the Indonesian market and investment by prominent figures in Indonesia. This resulted in the following research question: Would Indonesia’s prominent figures Anthony Salim portfolio listed at Composite Index in Indonesia consist of value stocks? In order to answer the research question, a quantitative method with a deductive approach has been applied, and historical stock prices and financial ratios over the time period 2019-2020 of Anthony Salim portfolio of eight stocks have been collected from Indonesia Stock Exchange. Intrinsic value and margin of safety by Phil Town (2014) were then calculated, and the research will look into its relationship with the value of the company based on its P/E ratios. The study suggests investors buy IMJS and IMAS stock of Anthony Salim based on the Phil Town method. However, the findings on Phil Town MOS were not statistically significant. The study did contribute with new knowledge, however, by increasing the data available for value investing in Indonesia and highlighting a need for more studies into smaller stock markets and for a period of financial distress, such as the financial crisis.

Keywords: Value, Investment, Intrinsic, Maring of Safety