Maybe you should've been a bit more specific in your question but otherwise you
are right.
This is a very simple model and it's not going to pretend it can predict x%
gain.
This model is intended to be quickly used relative to the other banks (better
if forward PE can be estimated and used), i.e. you can quickly understand each
of the relative position. With respect to the model, sure BBCA is the leader
now and it might not be true anymore by the end of the year. But at the moment
it is well ahead of the pack and if we are happy with the concept of systematic
and sectoral risks, then if the whole banking sector goes down, BBCA might
fare better relative to others. So one potential outcome is that the PEs of all
banks will be lower than it is today but it is still possible that, BBCA's PE
will remain higher than the rest of the banks. If the discount still doesn't
give you the premium you want, perhaps you shouldn't buy it. There have
been many other research done in relation to PE and PBV but let's not go there.
Just like with any other models, it only works with certain assumptions and
situation.
There are aspects that it can explain and others that can't.
NOTE: Just to be safe - these are just financial model discussion, not an
investment recommendation.
--- On Sat, 9/27/08, jsx_consultant <[EMAIL PROTECTED]> wrote:
From: jsx_consultant <[EMAIL PROTECTED]>
Subject: [obrolan-bandar] Re: QUIZ for investor (Banking sector)
To: obrolan-bandar@yahoogroups.com
Date: Saturday, September 27, 2008, 9:36 PM
The objective of this quiz, is NOT to find the BEST bank or the
BEST performance bank, BUT to find WHICH bank will give the best
GAIN in a year....
The 'DOG' bank might give better gain compared to
the 'ALREADY RISING' bank or may be worse.
BBCA's PER is already 16, if you want 50% gain in a year, then
BBCA's PER should be 24. Do you think BBCA can attain PER=24
considering the current economic situation ?.
--- In obrolan-bandar@ yahoogroups. com, Alex U <alexander_ujung@ ...>
wrote:
>
> Hope it's not too late to participate :)
>
> This is called PE Multiples valuation.
> The primary choice is the "Rising Star" BBCA because of high PE and
high PBV (therefore high ROE as well).
>
> Applying this approach further, it puts BMRI in the "Dog" category.
>
> Cheers
>
> --- On Sat, 9/27/08, jsx_consultant <jsx-consultant@ ...> wrote:
>
> From: jsx_consultant <jsx-consultant@ ...>
> Subject: [obrolan-bandar] QUIZ for investor (Banking sector)
> To: obrolan-bandar@ yahoogroups. com
> Date: Saturday, September 27, 2008, 9:54 AM
>
>
>
>
>
>
> ROE ranking:
> - BBRI, BBCA, BDMN, BMI: 29, 23, 22, 18%
>
> PBV ranking:
> - BMRI, BDMN, BBRI, BBCA : 1,9 2,5 3,4 3,8
>
> PER ranking:
> - BMRI, BDMN, BBRI, BBCA : 10, 11, 11, 16
>
> Pertanyaan:
> - Bank mana yg akan dibeli dan apa alasannya ?.
>
