Energi Mega Persada

In recent days, one of Bakrie Group stocks, Energi Mega Persada (ENRG), again became popular amongst the traders after rose from Rp70 to 100 per share, gained about 35% in less than a month. I personally do not care even if this stock rose to 1,000, because since 2009 I have decided to blacklist the entire Bakrie stocks, including ENRG, and until now the decision has not been changed. However, as ENRG recorded a profit of U.S. $ 214 million in the third quarter 2013, an increase of approximately 10-fold over the same period in the previous year, then you may assume that this stock is have an attractive fundamental because on the other side, its PBV was only 0.4 times aka low enogh. But is it so?

Compared to other companies in the same sector in Indonesia, ENRG is a new company established in 2001, ie when the Bakrie Family decided to get into the energy sector, in this case oil and gas (other than coal through the Bumi Resources/BUMI). Armed with the ability of the family in acquiring assets, in 2003 ENRG acquired its first asset, RHI Corporation, which indirectly owns 34.5% stake in Strait of Malacca Block, which then increased to 60.5%. In 2004, ENRG again add an oil block to its portfolio, this time Lapindo Brantas Inc., which holds 50% stake in Brantas Block in Sidoarjo, East Java. Also in 2004, ENRG held an IPO so then the company listed on the Stock Exchange.

Is It Bullish Again, or What?

Last Friday, February 21, 2014, the Jakarta Composite Index (JCI) closed at 4,646, so in year-to-date basis, the index has gained 8.7% during the year of 2014. Psychologically, some investors may confused at this point: Did the JCI gained too fast, so that later in the end it would fall, or it's just the beginning of another bullish period? What if it later successfully reached the 5,000 level like April last year?

As I had explained in the article entitled The Spirit of ‘Fresh 2014’, the entire stock indices in the world, including JCI, basically will continue to rise in the long term. But sometimes the rise is too early, so a downturn momentum is then required to ‘neutralize’ the market. So every time the stock index fell, you may call it as a ‘market correction’, aka to restore the JCI itself to a position that is supposed to be. At certain times, the drop was just a little so it does not become a big deal. But at other times, the JCI could decline more deep than usual. Usually the higher the previous rise experienced by JCI, then the lower the correction would be. Most people only pay attention to the market crash in the years of 1998 and 2008, without paid attention to that in previous years, the index has risen very quickly to make everyone had thought that buying stocks is a quick and easy way to become rich.

Adira Dinamika Multi Finance

Adira Dinamika Multi Finance (ADMF) became one of several companies that has released financial statements for the period of Fourth Quarter of 2013, aka the Full Year of 2013. And the results? Well, quite good! Its net income grew significantly, ie 20.3%, while its equity also rose 19.6%. But the interesting fact is, in contrast to the company’s well performance, the stock was continued to sag in the last two years, from the peak of Rp13,000 per share to 9,000. An opportunity for bargain hunters?

ADMF, as you might know, is one of the largest motor vehicle financing companies in Indonesia, both two and four-wheeled vehicles. The company was founded by a businessman named Theodore Permadi Rachmat in 1990, which the word 'Adira' is derived from the combination of words of PermADI and RAchmat. In 2004, the majority ownership of ADMF was acquired by Bank Danamon (BDMN), and since then BDMN continued to add their ownership up to 95%. Because of that, of exactly 1 billion outstanding shares of ADMF, only 46 million shares that owned by public investors, so consequently the stock became illiquid.

Jasa Marga

Jasa Marga (JSMR) is the oldest and the largest toll road operator in Indonesia, which by the end of 2012, the company held 73% of the entire length of toll roads in Indonesia. As a pioneer in the industry, JSMR also has a long history, ie since the company operates the Jagorawi toll road, the first toll road in Indonesia, in 1978. So when compared with some new private toll road companies, JSMR is practically the most established one. But still, the opportunity for company to grow is wide open. In 2013, JSMR completed the construction of Tanjung Benoa toll road, Bali, not yet including several other toll roads which scheduled to be completed within the next few years. Long-term prospects?

The infrastructure of toll road (or highway), frankly, is one of the most luxurious infrastructure in Indonesia. Residents of Jakarta and its surrounding areas are fortunate because the city is surrounded by several toll roads, but the story is totally different in other cities. In fact, of a number of toll roads operated by JSMR, including those that under construction, only two of them that located outside the Island of Java, namely Belmera toll road (Belawan - Medan - Tanjung Morawa) in North Sumatra, and Tanjung Benoa toll road in Bali. While the other toll road companies, they are also operating in Java, except Bosowa Group that operates the Makassar toll road, South Sulawesi.

How to Diversify Your Stock Investment

One of the 'natural problem' in investing is the lack of certainty about the future, where even a very well established company could stumble on particular issues, having a bad financial performance, or even bankrupt. That's why in investing, the decision to place all available funds in a single asset/stock only, is not recommended, no matter how good the stock was. An investment policy to place the fund into two or more stocks, that’s what we called diversification. The question is, how do we do it?

Diversification is basically aims to reduce the risk of loss. If you use all of your funds to pick one stock only, then if it was a wrong stock, whether it's because of fundamental change or it was wrong from the beginning, then the value of the losses can be very large. However, if you spread the funds at ten different stocks, then it is virtually impossible that all of those stock were the wrong choices. Even though you are still lay about investing, there will at least one or two stocks that successfully generate profits, and it certainly reduces the risk of loss that may occur.