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Application of The TOPSIS Approach in A Company's Stock Investment Ranking Decision Support System Based On Value Investing


Author: I Gede Iwan Sudipa*, I Komang Hare Prananda, I Made Subrata Sandhiyasa, Ketut Jaya Atmaja, Made Leo Radhitya
Faculty of Technology and Informatics, Study Program of Informatics Engineering, Institute of Business and Technology Indonesia (INSTIKI), Denpasar, Bali, Indonesia.
Published Date: 2024-03-09
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Keywords: Value investing approach; TOPSIS method; Investment criteria; Ranking of the best stock alternatives.
Abstract:
The objective of this study is to determine the most advantageous stock investment choices for a company by employing the Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) methodology. The study centres on the Indonesian stock market, specifically examining the top 10 businesses that have had the highest performance on the LQ45 index. The TOPSIS approach is employed to assess the appropriateness of individual companies by considering many parameters, including as market capitalization, current ratio, earnings stability, dividend history, growth rate, price-to-earnings ratio, and price-to-book value. According to the TOPSIS research, the study has identified PT Waskita Karya (Persero) Tbk (WSKT) and PT Waskita Beton Precast Tbk (WSBP) as the two most favourable investment options. Investors can utilise the findings of this study to create well-informed assumptions regarding their stock investments in the Indonesian market.