Cheap stocks, ordinary people think that stocks are cheap.
The true meaning of cheap shares is not seen from the nominal price. Cheap stocks are stocks that have a low price valuation.
Stock valuation is an assessment of the fair price of shares. So, the stock price of A$1 per share, for example, is not necessarily cheaper when viewed from its valuation.
Even with performance. Cheap stocks or low valuations do not mean the stock is not good in terms of fundamentals.
How to Calculate Cheap or Expensive Stocks
How to calculate cheap or expensive stocks can use a simple method. Look at the PER and PBV of a stock.
Price to earnings ratio (PER)
Price to earnings ratio is a ratio that describes the stock price of a company compared to the profits or profits generated by the company (earnings per share or net income per share).
In calculating PER, you must compare PER in the same industry. If the PER is lower than the average of other companies in the same industry, then the price of the company is considered cheaper or the stock is cheap.
PER . formula
PER = Share Price: Earnings per Share (EPS)
EPS = Net Profit: Number of Shares
- The smaller or lower the PER, the cheaper the stock price. It takes faster time for investors to return their capital
- A small PER ratio indicates a cheap stock price and has the potential to increase stock prices in the future
Price to Book Value (PBV)
Price to Book Value is the ratio of the stock price to the book value of the company. A low PBV is a consideration for investors in investing in shares or buying cheap shares.
Buy cheap stocks that have a small PBV ratio compared to the average PBV of similar industries. For example, the PBV is 2x. This means that the stock price is twice as expensive as the net capital.
PBV Rumus formula
PBV = Share Price: Book Value per Share (Total Equity: Number of Shares Outstanding)
Also Read: Do You Know How to Invest Stocks?
30 of the Best Cheap Stocks to Buy
- PT Adaro Energy Tbk
- PT AKR Corporindo Tbk
- PT Astra International Tbk
- PT Bank Tabungan Negara (Persero) Tbk
- PT Bekasi Fajar Industrial Estate Tbk
- PT Bank Pembangunan Daerah Jawa Barat dan Banten Tbk
- PT Bank Pembangunan Daerah Jawa Timur Tbk
- PT Bank Mandiri (Persero) Tbk
- PT Global Mediacom Tbk
- PT Bumi Serpong Damai Tbk
- PT Ciputra Development Tbk
- PT Puradelta Lestari Tbk
- PT Elnusa Tbk
- PT Erajaya Swasembada Tbk
- PT Gudang Garam Tbk
- PT Indofood Sukses Makmur Tbk
- PT Indah Kiat Pulp & Paper Tbk
- PT Indo Tambangraya Megah Tbk
- PT Japfa Comfeed Indonesia Tbk
- PT Link Net Tbk
- PT PP London Sumatra Indonesia Tbk
- PT Media Nusantara Citra Tbk
- PT Bukit Asam Tbk
- PT PP (Persero) Tbk
- PT Pakuwon Jati Tbk
- PT Semen Indonesia (Persero) Tbk
- PT Pabrik Kertas Tjiwi Kimia Tbk
- PT United Tractors Tbk
- PT Wismilak Inti Makmur TbkPT Integra Indocabinet Tbk
Scoop Mercy Stock Price Innova
Remembering Lo Kheng Hong’s advice, “don’t buy shares of companies that have a high valuation!”
If you’ve got a good company with a cheap stock price or an analogy to the mercy of the Innova price, scrape the stock. If you need wholesale, spend capital for long-term investment.
Also Read: How To Calculate Stock Price
Because, having good company shares, profits continue to grow positively and big, you are like having a money printing machine. Flood money until old.