At the moment, we are entering a subtitle where we are required to give our small analysis about the well-being of PT Mayora Indah, Tbk. We will discuss this analysis in two broadest views. First we will note some special moments (events) that give effect for the company’s stock. Second we will analyze it from the one special behavior of stock, that is dividend (we will only talk a title about company’s cash dividends to its stock holders).
Our data data is about stock’s open, high, low, and closed price with its volume of trade ranged from January 2nd of 2011 till October 28th of this year (since October 29th and 30th were Saturday and Sunday). From graph below we can see the brief part of the company’s stock performance. The four price indicators with left axis and the volume traded in its right axis.
a) Stock Analysis: Specific Experiences of PT. Mayora Indah Tbk.
PT. Mayora Indah, Tbk. experienced many major and minor fluctuations in their stocks’ closing prices and volume of transactions during the period from January 2, 2011 until October30, 2011. The firm’s closing stock prices reached its peak during the period on July 28 when it reached Rp. 17.300. On the contrary, the firm’s closing stock prices hit its lowest point during the period on March 8 when it hit Rp. 9.350.
Period I (January 2nd – April 3rd)
Firm’s closing stock prices made no significant increase and the firm’s stock prices, on average, decreased. This is caused by the increase in the price of raw materials decreased the firm’s net income by 23.9%, even though the firm was able to increase production by 28.6% and sales by 28.95%. The significant decrease in the firm’s net income definitely had an impact on the behavior of the firm’s stock prices and volume of transactions. Hence, the volumes of transactions for this period were pretty high compared to the other periods; lots of people were willing to trade the firm’s stocks. From the firm’s point of view, the firm’s stock prices during the period were low compared to the other periods because the firm wanted people to buy their stocks. In other words, they wanted to attract more investors.
Period 2(April 4th-July 28th)
The firm’s closing stock prices gradually increased (reached Rp 17.300 at its peak) and experiencing only several minor decreases in stock prices during this period. It is important to note that July is a month before lebaran, when the consumer demands are high especially for the goods that are produced by PT. Mayora Indah, Tbk.
One reason for the increase in the firm’s stock prices during this period was the company’s strategies. For example, the firm planned to develop 12 products for the year of 2011. Another important reason was the decision by the firm to increase their capital expenditure. During2011, the firm borrowed Rp. 700 million from several banks
Period 3(July 29th-October 30th)
After July 28th, the firm’s closing stock prices gradually decreased until October 3rd. Afterwards, it gradually increased after October 3rd . There are two sharp drops in the firm’s stock prices during this period: after July 28th and during lebaran. This drop is because it was the time when the demand for the firm’s goods decreases.
However, why are the volumes of transactions during this period are very low? If the firm’s stock prices decrease, shouldn’t the volume of transactions decrease as well? The low volumes of transactions during this period indicate that current stockholders are not active in trading their ownership. In other words,owning the company is a small risk for current stockholders.
b) Stock Analysis: Dividends Distributed by PT Mayora Indah Tbk.
In 2011 (whole year), there are 221 planned distribution of cash dividends with its uniqueness to be distributed to any kind of stockholders. In first quarter (January—March), MYOR only distributed 6 cash dividends (2.7149%) out of all planned dividends. In second quarter, the company distributed its cash dividends higher for 48 stockholders (28.5068%) while the company reached its highest amount of cash dividends distribution in the third quarter with 86 cash dividends—we will not use the fourth quarter data because of unknown data of stock prices and its volume of trade—distributed (57.0136%).
In such a case, there were so many factors that supported and caused each significant movement of each volume traded, stock prices and cash dividends distributed from the company. At the moment, as we are starting to analyze what happened to those dynamic company’s data, we will consider huge issue that was faced by PT Mayora Indah, Tbk. concerning dividends recently. Let us discuss it:
Cost of Raw Materials (Supply) and (Seasonal) Demand of Public—Dividends Payment
The most general raw materials used for this company’s industry are flour, oil, sugar, and coffee (Kontan.co.id/RakaMahesaW). What happed to this raw material costs? Let us see them. In first quarter and its second, PT Mayora faced huge problem in increasing amount of those costs. Even in the first quarter only, these costs roughly raised until 12% (from 10%). This change in supply was majorly caused by huge constraints in climate condition in Indonesia all the way of 2010 and at the beginning of this 2011.
How could those things affect the well-being of company’s stock performance? We thought it has been obvious while we are looking at the amount of cash dividends in the first semester (even in the first quarter) that from information above, we have understood that during the time, there were only small numbers of cash dividends which were distributed. From the first paragraph (of this subtitle), we have seen that. Those increasing costs of raw materials must have caused stockholders became doubtful (thus the financial risk became higher). In cash dividend point of view, we can instantly see that in those periods, the value (price) of stock reached its lowest in the year. While supported that there were only several cash dividends to be distributed, we can assume it directly that the huge volume of transaction in those periods was the effect of the rapid change the company faced.
From figure in previous page, we can understand it quickly how the invertors’ (stockholders) behaviors were affected by steady decreasing trend line of stock values. This means investors avoided the risk of raw material costs (in one point of view) in the first quarter. What about the next periods? Greatly saying in rough analysis, we can see that the company performed well. Even dividends had close relations to the stock value and stable condition of trade volume of stock. Started in the second half of the year, the company started to distribute so many cash dividends, that is more than 50% of cash dividends in the year (57.0136%).
From the whole year graph of company’s stock at that time, we can understand it directly that started in second till the third period of the ear, the trend line of value (price) of stock started to increase even though it has not been so significant (at the second period), the volume of stock traded was going to be stable time by time. We can conclude that this most stable trend line of trade volume was caused by the decrease of company financial risk (from increase of company’s value—price) in cash dividends point of view. So, we could see that investors were willing to wait until the period of cash dividends distribution (as shown in small-stable volume in the second quarter of the year).
In last period of the second quarter of the year and in the whole third quarter of the year, we can see that the value (price) of the company’s stock reached the highest peak. What are the causal and effects of this condition? Let us see the facts and analysis of what happened at the period. In the third quarter, as what Mr.AndreSukendraAtmadja—as the general director of PT Mayora Indah, Tbk.—had predicted before, it was right that in the last period of second quarter and in third period of the year, the raising cost of raw material (flour, sugar, oil, and coffee) declined. This happened just in the right moment of business. In the third period, Indonesian people was facing lebaran day with its preparation, when people were making prediction the right time of doing lebaran shopping. As this company is all about food producers (more durable), the sudden high-seasonal demand of products produced by the company was inevitable.
Greatly saying too, in the same period (third quarter), suppliers of the company’s raw materials had been ready to supply it even in sudden high supply, 20% bigger amount of raw materials per month to be supplied in such a high-sudden people’s demand. Moreover, suppliers could do that without raising prices of those raw materials (kontan.co.id/VeriNurhansyahTragistina). This resulted in rapid raise of value and reached its highest peak at Rp17.300,00 of closing price of stock. Such a situation must have been able to be predicted by investors before. In such a situation, moreover after being paid cash dividends by the company (since in the period, there were 57.0136% of cash dividends of the year were distributed at that period), trade volume was getting rapidly fluctuating again, when it was the best time for receivers of cash dividends (investors) to get capital gain.
In month of October, company still experienced stable price of the raw material, thus financial risk of the company was still low, so investors tends to keep their investments (shown in steady small amount of trade volume) because while the cash dividends payment were only 4.5% of all and the values (price) of company went down because of the seasonal demand behavior of customers. So, we can assume that the investors were avoiding capital losses if they had been trading their stocks. On top of that, this company is still confident to reach at least level Rp16.000,00 of closing price of stocks at the end of the year since customers will face Christmas and New Year Holiday (Inilah.com/Ahmad_Munjin).
