Steady Momentum Could Soon Make Indonesia a “Buy”

Analyst recommendations have gradually improved over the past five years, and now Indonesia is on the verge of a “buy” recommendation.

Learn more: How to Benefit from Our Watching the Street Charts

The top two stocks with the most positive recommendations are related to construction in Indonesia. Wijaya Karya Beton is a precast concrete manufacturer with a capitalization of $557 million.

Recommendations have improved over 5yrs and now #Indonesia is on the verge of a "buy"

Bank Jatim is up 35% YTD, and Bank BJB is up 290%! After such large increases in value, both are currently receiving negative recommendations.

Consensus Earnings Estimates: Indonesia

Analysts’ expectations have hovered around 10-15% EPS growth, but Indonesia has seen 4 years of falling earnings.

Average earnings estimates for 2016 are lower this time at 5%.

Expectations have been 10-15% EPS growth, but #Indonesia has seen 4yrs of falling EPS

Though real estate developer Lippo Karawaci has among the most negative recommendations, it also has the highest EPS growth estimate, and its share price is down 30% YTD.

Bukit Asam has the worst EPS growth estimate, but the share price has gained about 180% YTD.

Consensus Target Prices: Indonesia

Target price expected returns and actual returns are currently in line for 2016. The 12-month forward target prices imply an expected return of 13%.

Target price expected returns and actual are currently in line for 2016 in #Indonesia

XL Axiata is part of one of the largest telecom groups in Asia, Axiata Group Bhd (AXIA.KL). Of AXIA’s listed group companies, all except the one in Sri Lanka has seen a share price loss of about 30% YTD.

Bank Jatim and Bank BJB are also found among the lowest expected returns, as they’ve performed well YTD.

 


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About the Author

Dr. Andrew Stotz, CFA
Dr. Andrew Stotz, CFA is the CEO of A. Stotz Investment Research, a company providing institutional investors with ready-to- invest portfolios in Asia that aim to beat the benchmark through superior stock selection. The company also provides buy- and sell-side clients with financial models to value any company in the world and World Class Benchmarking to determine what companies are financially world class. Previously, as Head of Research at CLSA, Andrew was voted No. 1 Analyst in Thailand in the Asiamoney Brokers Polls for 2008 and 2009. He was also voted No. 1 Analyst in Thailand in the 2009 Institutional Investor magazine All-Asia Research Team Report. Andrew earned his PhD in finance at the University of Science and Technology of China in Anhui province, with a focus on answering questions raised by fund managers and analysts during his career about picking stocks and managing portfolios. In addition, Andrew has been a lecturer in finance for 22 years at various universities in Thailand. Since 2013, he has been the president of the CFA Society of Thailand. He is also the author of How to Start Building Your Wealth Investing in the Stock Market.