In 2019, I was looking for more defensive stocks for my portfolio. PT Indofood Sukses Makmur Tbk (INDF) was on my list, but the high price-to-earnings ratio and price to book value make me wait for the right timing. Meaning I will buy INDF when the price to earnings ratio and price to book value drops in which I comfortable with.
In the same year, 2019, INDF stock price to earnings ratio drops around 6 points from approximately 17 to 12, and the price to book value drops approximately 0.5 points from about 2 to 1.43. For me, it is time to buy some shares of INDF.
Besides valuations, why I chose INDF is because the economic moat of the company is excellent. I will share the economic moat later on.
The company's reputation is solid! With no criminal record, INDF has succeeded in maintaining its business on the right track of the law.
INDF has a subsidiary of their company ICBP PT Indofood CBP Sukses Makmur Tbk with a product called Indomie. I assume that nearly all of Indonesia would know. It's a strong product that, for me, I thought ten years from now I will still consuming Indomie!
Besides all of the financial ratios, that is my simple reason why I bought INDF shares, and the most important is I wait until the valuation is comfortable for me.
Waiting is underrated. But I will keep learning to wait.
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