The impact of Fundamental Factors on Stock Return of The Engineering and Construction Services Company
Keywords: Financial Performance, Engineering and Construction, Stock Return, Fixed Effect Model
Abstract
This research was conducted to analyze the impact of selected fundamental factors on stock returns of Engineering and Construction Companies listed on the Indonesia Stock Exchange (IDX) using a quantitative approach. The research population includes all Engineering and Construction Companies listed on the IDX but 10 were selected as cross-section samples using a simple random sampling technique with criteria include being listed on the IDX and having time-series financial report data for 2015Q1 - 2019Q2 period. Data were retrieved from the companies’ audited financial statements and the independent variable which is stock return was determined using Panel Data and analyzed with Multiple Regressions. Meanwhile, the model specification test was produced using the Fixed Effect Model as the fit model. Findings. The results showed several fundamental factors of CR, NPM, PBV, EPS, and ROE partially has a significant positive effect on stock returns while DER has a significant negative effect and PER has a slightly positive influence. These findings are expected to contribute positively to the development of theories concerning the financial performance of stock returns. Moreover, the managerial implication of this research is that investors can use fundamentals analysis with a focus on CR, DER, EPS, NPM, PBV, PER, and ROE as the basis for decision making due to their influence on Stock Return.
Downloads
References
Allozi, N. M. & Ghassan S. O. (2016). The Relationship between the Stock Return and Financial Indicators (Profitability, Leverage): An Empirical Study on Manufacturing Companies Listed in Amman Stock Exchange. Journal of Social Sciences (COES&RJ-JSS), Vol. 1 No. 7, 1-17.
Farkhan & Ika. (2012). Pengaruh Rasio Keuangan terhadap Return Saham Perusahaan Manufaktur di Bursa Efek Indonesia. Jurnal Bisnis dan Manajemen. Vol. 9, No 1, 1-13.
Kheradyar, S., Ibrahim, I., & Mat N. F. (2011). Stock Return Predictability with Financial Ratios. International Journal of Trade, Economics and Finance, Vol.2, No.5, 391-396.
Sadeghzade, J., Seyednezhad, F, & Kheradyar, S. (2016). Estimate the profitability of accepted companies in Tehran Stock Exchange: Because of the relative position (ROE) of the companies. International Journal of Applied Operational Research-An Open Access Journal, Vol. 2, No. 5, 1-21.
Seng, D. (2012). Fundamental Analysis and the Prediction of Earnings. International Journal of Business and Management, Vol. 7, No. 3, 1-32.
Kariza, C. I. (2017). Pengaruh Suku Bunga, Earning Per Share (EPS), Net Profit Margin (NPM), Price to Book Value (PBV) Terhadap Return Saham (Studi Empiris Pada Perusahaan Sektor Properti, Real Estate, dan Konstrusi Bangunan di Bursa Efek Indonesia). Equator Journal of Management and Enterpreneurship, Vol. 5, No. 4. 1-16.
Rahmawati, A. (2017). Kinerja Keuangan dan Tingkat Pengembalian Saham: Studi pada Perusahaan Asuransi di Bursa Efek Indonesia. Jurnal Bisnis dan Manajemen, Vol. 7 No. 1, 1-15.
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.