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The Meaning of Underweight Stocks by Morgan Standley, Experienced by GOTO

Meaning underweight stock is the opposite of overweight. As an investor you must know.

Considering that stocks are able to provide high profits, of course many are interested in carrying out their investments.

Just like the big profits, the risks that stocks provide are also quite large. You can consider all of these before choosing the type of investment instrument.

There are many terms in the world of stocks. One of them is underweight. As an investor you need to know what that means underweight share.

Also Read: Recommendations for Long Term Stocks that are Suitable for Investment

What Stock Underweights Mean

Underweight is an antonym or the opposite of overweight share. The term indicates which stock is predicted to decline compared to other stocks.

The shares must be in the same sector. This indicates that the stock is predicted to experience a decline.

The decline that occurs is even below average or too low.

There are various terms that potential investors need to know. This is because in the world of investing including stocks you will come across several terms.

Both for stock market analysis and others. For stock underweight itself will experience a serious price drop.

Different from overweightwhere the condition of the stock has increased. Unfortunately recommendation underweight stock is lower than recommendation strong buy.

Also Read: Shares of Insurance Issuers Rise, AHAP Takes the Highest Position

GOTO Underweight Stocks

GOTO or Gojek Tokopedia shares are one of the stocks that are currently underweight. PT GoTo Gojek Tokopedia Tbk (GOTO) means experiencing a decrease in trading prices in the capital market.

Morgan Stanley recommended the stock underweight. This can be seen in trading Friday, July 22, 2022 yesterday. The share price closed at 308 levels, up at the level of 8 points.

Appeared to have increased 2.67% from the previous day. Trading a week ago, GOTO’s share price decreased by 14 points or equivalent to 4.35%.

GOTO’s stock price has decreased during a trend in the nearest future.

The GOTO stock recommendations are: underweight and the target is Rp. 230. The last price is Rp. 230 for the meaning of underweight share.

The valuation of the share price is quite reasonable. Because, indeed, GOTO shares deserve to be more premium than other types.

The potential for growth of these shares will generate income from 2021-2024 faster by 69% compared to the others at 33%.

GOTO’s stock valuation is quite expensive. In addition, this stock is also quite low profitability.

With this condition, you can suggest to buy the stock in accordance with the meaning underweight.

Also Read: GoTo Shares Reach Rp 400 Under Solid Leadership

Morgan Stanley Analysis

In fact, according to Morgan Stanley, GOTO shares have a high valuation. But the meaning of underweight can help investors in selling or buying shares.

Currently GOTO shares are traded at Enterprise Value to Revenue 20 times for the next year. So it shows the price is much higher than the second time counterpart.

Even Morgan Stanley also assumes that the risk factor for the stock is out of the Vietnam and Singapore markets.

If GOTO shares dare to compete, there is a high probability of EBITDA. Everything depends on the break-even point, will compete between the two according to meaning underweight stock investment. (R10/HR-Online)