Analysis of fundamental factors and technical indicators reveals limited impact on stock returns in the financial sector.
This study aims to examine the influence of micro-level fundamental factors and technical stock indicators on stock returns. To minimize information asymmetry, firms communicate with investors through signals, which are reflected in changes in stock performance. These signals are interpreted by investors as either positive or negative signs. The fundamental factors are analyzed using several financial ratios, including liquidity (current ratio), solvency (debt-to-equity ratio and debt-to-asset ratio), and profitability (net profit margin, return on assets, and earnings per share). In addition, technical indicators such as the moving average and stochastic oscillator are considered. This study uses secondary data from 41 financial-sector companies listed on the IDX over the period 2019–2023, and data analysis is conducted using EViews 12. The results of this study show that return on assets (ROA) has a significant and negative effect on stock returns, whereas other fundamental factors (CR, DER, DAR, NPM, and EPS) and technical factors (MA and SO) do not show statistically significant impacts on stock returns. Future research could include samples from other sectors and incorporate additional variables such as exchange rate, inflation, company size, and sales growth, among others.
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Azzahra et al. (2025) studied this question.
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