Logindo Samudramakmur

On yesterday, Monday February 23, 2015, Jakarta Composite Index (JCI) closed at 5,403, which is recorded as the highest position in history so far. In friendly market conditions like these days, most of the stocks on the Stock Exchange are keep breaking their highest price records. However, some stocks has a different story in which they are not rising but falling instead. And one of them is Logindo Samudramakmur (LEAD), which is currently traded at Rp1,845 per share, or waaayy below its peak position ie 5,325. In contrast to some other stocks that fell either because lack of fundamentals, or because the company’s financial performance has decreased, or because of certain negative sentiments, then LEAD seems to have no problems. Is this an opportunity?

'Wonderful Company at a Wonderful Price'

Warren Buffett once stated one of his famous quotes: "It is far better to buy a wonderful company at a fair price, than a fair company at a wonderful price." If we notice, in the sentence Buffett stated that in selecting stocks to buy then we have to choose one best factor, whether it is the lowest possible price, or the highest quality of the company's fundamentals. Is almost impossible for any value investor to be able to find a company with a very, very good fundamentals, but on the other hand it is sold at a very, very low price. So, in this case, Opa Warren prefers 'wonderful company at a fair price'. Not necessary low price, as long as not too expensive.

But hey, what if we could find a stock like that? That is, a very good stock which is sold at a very low price?

Best Stocks in Terms of Real Growth of the Company

If you want to invest in the Indonesian Stock Market through mutual funds, one way in determining the quality of mutual funds is by looking at the track record of the fund’s performance in the long term, say five years. If the compound annual growth rate (CAGR) of a mutual fund is better than CAGR of Jakarta Composite Index (JCI) in the same period, then we could simply said that it has a good performance. If the difference is fairly large, say 17% per annum while the CAGR of JCI over the same period was only 7% (so that the difference reaches 10%), then it is even better.