Telekomunikasi Indonesia (TLK) Shares Soar 2.75% on Institutional Support

Telekomunikasi Indonesia (TLK) shares surged 2.75% intraday, reaching their highest level since January 2025, marking a two-day winning streak with a cumulative gain of 2.46%.

The strategy of buying TLK shares after they reached a recent high and holding for 1 week yielded moderate returns over the past 5 years, but underperformed the market. The annualized return was 4.3% from May 2020 to May 2025, compared to the S&P 500's 7.4% return over the same period. However, the strategy had a maximum drawdown of only 5.2%, which indicates it was relatively stable. Given TLK's 11.52% PE ratio, the returns suggest the stock may not have been overly expensive relative to its earnings.

Northern Trust Corp recently reduced its stake in Telekomunikasi Indonesia by 7.2%, which could indicate a shift in investor sentiment or confidence in the company's future prospects. This move might have contributed to some volatility in the stock price as investors reassess their positions.

Despite the reduction in stake by Northern Trust Corp, Telekomunikasi Indonesia remains an attractive option for dividend-seeking investors. The company offers a high dividend yield of 6.71%, coupled with strong profitability and a reasonable valuation. These factors continue to draw investors looking for stable income streams, potentially mitigating the impact of the stake reduction.

Ballentine Partners LLC, on the other hand, increased its holdings in Telekomunikasi Indonesia by 50.9% in the fourth quarter. This significant increase suggests a positive outlook on the company's performance and future growth potential. Such institutional support can bolster investor confidence and contribute to the stock's upward momentum.

Looking ahead, the upcoming Q1 2025 earnings release for Telkom Indonesia is expected to be a key event that could influence the stock price. Investors will be closely monitoring the company's financial performance for the quarter, as strong earnings could further drive the stock higher, while disappointing results might lead to a correction. The earnings report will provide valuable insights into the company's operational efficiency, revenue growth, and profitability, all of which are crucial for maintaining investor confidence.