The shares of PT Indah Kiat Pulp and Paper (INKP) Tbk and PT Pabrik Kertas Tjiwi Kimia Tbk (TKIM) streaked high. From the beginning of the year, the prices sped up hundreds percent.
TKIM shares already strengthened 358.05%, from Rp 2,970 to Rp 13,300 at the closing price 29/5/2018. While INKP, the stock has gone up by 209.72% from around Rp 5,500 flew to Rp 16,550.
However, the price movement of both stocks is still reasonable, because based on the fundamental analysis, the Price Earning (PE) Ratio is still quite low at the beginning of the ride. The ratio is around 2 last year, and now the PE ratio of INKP is around 10.7, while TKIM is 15.9.
Although the growth is promising, we should put extra attention when the PER is higher than 15. Despite the opportunity for advancement is virtually limitless, the growth stocks also carry a lot of risk. Growth stocks is often overvalued because it’s a money-maker. Therefore, if we want to invest in growth stocks, we should be careful in analyzing the price movement. Contrast with value stock, growth stocks is not suitable for the long term investment.