Jakarta. Renowned Indonesian investor Lo Kheng Hong shared his criteria for selecting companies to invest in during the BNI Investor Daily Summit 2024 at the Jakarta Convention Center on Tuesday. Known as the "Warren Buffett of Indonesia," Lo emphasized that he focuses on company performance, not macroeconomic factors when building his portfolio.

Lo outlined six key factors he considers before making an investment

"The first thing I look at is the honesty of the company’s owners, directors, and commissioners. If they are not honest or good people, I won’t invest in the company," Lo said.

The second criterion is the nature of the business. "Some industries are good, some are bad. I only buy shares in companies with good business sectors," he explained, noting his preference for banking and commodities sectors due to their strong performance and low valuations.

The third factor Lo evaluates is the company’s profit. "I don’t buy companies with small profits. I only invest in businesses with substantial earnings," he stated.

The fourth factor is growth. "I look at whether the company’s profits are growing every year," he added, citing companies like state-owned Bank Negara Indonesia (BNI) as examples of what he calls "wonderful companies," with consistently increasing profits.

Valuation is the fifth consideration. Even if a company is strong, Lo avoids buying its shares if they are overpriced. "I only buy good companies at a reasonable price. If I can get them at a discount, even better," he said.

The final factor Lo considers is the dividend yield. "If the dividend yield is high, I’m very interested because earning big dividends every year is quite enjoyable," he noted.

Lo concluded by saying that he disregards global market trends and solely focuses on company performance. "If the company meets these six criteria, I buy," he affirmed.

Add as a preferred source on Google +