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Zarah Puspitaningtyas


Stock price movements can be predicted using fundamental analysis based on the
information presented in the company's financial statements. Based on the analysis,
investors can measure the company's performance and predict the direction of stock price
movements. Prediction ofstock price movement using profitability analysis is done by testing
the effect of profitability to stock price. The intended stock price is the market price that
occurs on the exchange at a certain moment determined by the market participants.
Profitability in this study is measured by using indicators ofreturn on asset, return on equity,
net profit margin, and earnings per share. The study object is a non-banking company listed
on the Indonesia Stock Exchange and listed in the LQ45 Index in the period 2011-2016. The
data were collected using purposive sampling technique. Furthermore, the data were
analyzed using multiple linear regression method. At a significance level of 5%, the results
of the analysis concluded that only earnings per share have a significant effect on stock
prices. Meanwhile, the other three profitability indicators, ie return on assets, return on
equity, and net profit margin have no effect on stock prices. Thus, the results of this study
indicate that profitability measured using indicators of return on assets, return on equity,
and net profit margin does not reflect stock price movements. In other words, stock price
movements can only be predicted using earnings per share indicator.
Keywords: fundamental analysis, profitability, stock price

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