Citations


Contact Us

For Marketing, Sales and Subscriptions Inquiries
2637 E Atlantic Blvd #43110
Pompano Beach, FL 33062
USA

Conference List

The Economics and Finance Letters

December 2021, Volume 8, 2, pp 142-153

The Impact of Fundamental Factors on the Share Price of Micro-Sized Nasdaq Listed Technology Companies

Simon Rafaqat

,

Sahil Rafaqat

,

Saoul Rafaqat

,

Dawood Rafaqat

Simon Rafaqat 1 ,

Sahil Rafaqat 1 Saoul Rafaqat 1 Dawood Rafaqat 1 
  1. Forman Christian College (A Chartered University), Lahore, Punjab, Pakistan. 1

Pages: 142-153

DOI: 10.18488/journal.29.2021.82.142.153

Share :

Article History:

Received: 08 February, 2021
Revised: 12 March, 2021
Accepted: 05 April, 2021
Published: 26 April, 2021


Abstract:

The paper aims to examine the impact of fundamental factors on the share price of the companies in the sector of technology. Therefore, the study has selected eighteen micro-size technology companies listed in NASDAQ with a market capitalization between $50 million and $300 million. The data have been obtained from these companies’ annual reports, NASDAQ, and SEC ranging from 2015 to 2019. The study evaluates the influence of firm size, earning per share, debt equity ratio, current ratio, operating cash flow ratio, return on equity, assets turnover ratio, return on assets, and the net profit margin on the share price of the selected companies. Moreover, the study uses multiple regression analysis, ANOVA, Pearson correlation, normality, multicollinearity, heteroscedasticity, autocorrelation test to find the effect of predictor variables on the share price. The results show that the operating cash flow ratio has a positive insignificant effect while debt equity ratio, net profit margin, and return on equity have a negative insignificant impact on the share price. However, return on assets, earning per share, and firm size have a positive significant relationship with share price, whereas the current ratio and the asset turnover ratio have a negative significant relationship with the share price. In conclusion, although the variables have a more negative insignificant effect than the positive insignificant impact on the share price, the variables have a more positive significant effect than a negative significant influence. Overall, the fundamental factors collectively have a significant impact on the share price of the experimented companies.
Contribution/ Originality
This study is one of the very few studies which have investigated the effect of the fundamental factors on the share price of the eighteen micro-size technology companies listed in NASDAQ over the period from 2015 to 2019.

Keywords:

Return on assets, Return on equity, Earnings per share, Debt equity ratio, Firm size, Net profit margin, NASDAQ listed, Technology company, Share price.

Reference:

Abdulmannan, A. A., & Faturohman, T. (2015). The relationship between fundamental factors and stock return: A case based approach on banking companies listed in Indonesia stock exchange. Journal of Business and Management, 4(5), 579-586.

Adebisi, O. S., & Lawal, K. O. (2015). Equity share price determinants: a survey of literature. Arabian Journal of Business and Management Review (OMAN Chapter), 5(3), 38-44. Available at: 10.12816/0019112.

Al-Malkawi, H. A. N., AlShiab, M. S., & Pillai, R. (2018). The impact of company fundamentals on common stock prices: Evidence from MENA region. The Business & Management Review, 9(4), 162-172.

Al Qaisi, F., Tahtamouni, A., & Al-Qudah, M. (2016). Factors affecting the market stock price-The case of the insurance companies listed in Amman Stock Exchange. International Journal of Business and Social Science, 7(10), 81-90.

Alam, S., Miah, M. R., & Karim, M. A. (2016). Analysis on factors that affect stock prices: A study on listed cement companies at Dhaka stock exchange. Research Journal of Finance and Accounting, 7(18), 93-113.

Andikasari, R., & Sugiyono, S. (2018). Effect of return on equity, price earning ratio, earning per share, and firm size on stock prices. Journal of Management Science and Research (JIRM), 7(2), 2-17.

Araújo, R. C. D. C., & Machado, M. A. V. (2018). Book-to-market ratio, return on equity, and Brazilian stock returns. RAUSP Management Journal, 53(3), 324-344. Available at: https://doi.org/10.1108/RAUSP-04-2018-001.

Asmirantho, E., & Somantri, O. K. (2017). The effect of financial performance on stock price at pharmaceutical sub-sector company listed in Indonesia stock exchange. Scientific Journal of Accounting, Faculty of Economics, 3(2), 94-107. Available at: 10.34204/jiafe.v3i2.778.

Astuty, P. (2017). The influence of fundamental factors and systematic risk to stock prices on companies listed in the Indonesian stock exchange. European Research Studies, 20(4A), 230-240.

Bintara, R., & Tanjung, P. R. S. (2019). Analysis of fundamental factors on stock return. International Journal of Academic Research in Accounting, Finance and Management Sciences, 9(2), 49-64. Available at: 10.6007/IJARAFMS/v9-i2/6029.

Chasmi, N., & Fadaee, M. (2016). Impact of financial performance and growth opportunities on success or failure of companies: Evidence from Tehran stock exchange. Journal of Accounting and Marketing, Science and Research Branch, Islamic Azad University, Mazandaran, Iran, 5(2), 2-5.

Dang, N. H., & Tran, M. D. (2018). Investigation of the impact of financial information relevance on stock prices: The case of Vietnam. Management and Accounting, 22(2), 423-437.

Er, S., & Vuran, B. (2012). Factors affecting stock returns of firms quoted in ISE market: A Dynamic panel data approach. International Journal of Business and Social Research, 2(1), 109-122. Available at: https://doi.org/10.18533/ijbsr.v2i1.209.

Gautam, R. (2017). Impact of firm specific variables on stock price volatility and stock returns of Nepalese commercial banks. International Journal of Research in Business Studies and Management, 4(6), 33-44. Available at: 10.5958/2319-1422.2017.00027.3.

Gursida, H. (2017). The influence of fundamental and macroeconomic analysis on stock price. Journal of Applied Management and Business, 3(2), 222-234. Available at: http://dx.doi.org/10.26737/jtmb.v3i2.324 .

Haque, S., & Faruquee, M. (2013). Impact of fundamental factors on stock price: A case based approach on pharmaceutical companies listed with Dhaka stock exchange. International Journal of Business and Management Invention, 2(9), 34-41.

Imansyah, S., & Mustafa, M. H. (2021). The analysis of financial ratios effect on the stock price of consumer goods sector companies listed in KOMPAS 100 index. Dinasti International Journal of Digital Business Management, 2(2), 371-384. Available at: https://doi.org/10.31933/dijdbm.v2i2.779.

Islam, S., Arafin, M., & Zohora, F. T. (2017). Factors affecting share price of cement industry: A study on listed cement companies of DSE. European Journal of Management and Business Economics Account, 5(6), 48-66.

Julianto, A. R., & Syafarudin, A. (2019). Stock return analysis and implications in company value (plastic and packaging companies listed in IDX). International Journal of Engineering Technologies and Management Research, 6(7), 101-118. Available at: https://doi.org/10.29121/ijetmr.v6.i7.2019.420.

Khan, B., Tahir, M., Nasir, A. M., & Mushtaq, M. (2019). The impact of companies' internal factors on stock liquidity in Pakistan. Afro-Asian Journal of Finance and Accounting, 9(4), 459-473.

Macharia, P. I., & Gatuhi, S. K. (2013). Effect of financial performance indicators on market price of shares in commercial banks of Kenya. International Journal of Management and Business Studies, 3(3), 57-60.

Medyawati, H., & Yunanto, M. (2020). Determinant of stock price manufacturing company: Evidence from Indonesia. Journal of Economics and Business, 3(2), 524-535. Available at: 10.31014/aior.1992.03.02.217.

Milošević-Avdalović, S. (2018). The impact of firm specific factors on the stock prices: Empirical evidence from Belgrade stock exchange. Industry, 46(2), 7-20. Available at: 10.5937/industrija46-15271.

Nautiyal, N., & Kavidayal, P. C. (2018). Analysis of institutional factors affecting share prices: The case of National stock exchange. Global Business Review, 19(3), 707-721. Available at: https://doi.org/10.1177/0972150917713865.

Nazir, M. S., Nawaz, M. M., Anwar, W., & Ahmed, F. (2010). Determinants of stock price volatility in Karachi stock exchange: The mediating role of corporate dividend policy. International Research Journal of Finance and Economics, 55(55), 100-107.

Ozlen, S. (2014). The effect of company fundamentals on stock values. European Researcher, 3(2), 595-602.

Perdana, M. K., & Adriana, C. H. (2018). Factors influencing the stock price of banking companies in the Indonesia stock exchange. Journal of Accounting and Strategic Finance, 1(1), 57-68. Available at: https://doi.org/10.33005/jasf.v1i01.26.

Ramadianto, F., & Fuadati, S. R. (2019). Effect of return on equity, return on assets, and earning per share on share prices. Journal of Management Science and Research (JIRM), 8(11), 1-15.

Robbetze, N., De Villiers, R., & Harmse, L. (2017). The effect of earnings per share categories on share price behavior: Some South African evidence. Journal of Applied Business Research (JABR), 33(1), 141-152. Available at: https://doi.org/10.19030/jabr.v33i1.9886.

Sakia, B., & Sugiyono, S. (2019). The effect of dividend policies, company value, and profitability towards LQ45 company share prices. Journal of Management Science and Research (JIRM), 8(4), 1-17.

Saleh, M. (2015). Relationship between firm’s financial performance and stock returns: Evidence from oil and gas sector Pakistan. Journal of Energy Technologies and Policy, 5(10), 27–32.

Sharif, T., Purohit, H., & Pillai, R. (2015). Analysis of factors affecting share prices: The case of Bahrain stock exchange. International Journal of Economics and Finance, 7(3), 207-216. Available at: 10.5539/ijef.v7n3p207.

Subing, H. J. T., & Kusumah, R. W. R. (2017). An empirical analysis of internal and external factors of stock pricing: Evidence from Indonesia. Problems and Perspectives in Management, 15(4), 178-187. Available at: 10.21511/ppm.15(4-1).2017.02

Sundaram, S., & Rajesh, M. (2016). Impact of fundamental factors on share price movements. International Journal of Scientific Research, 5(5), 290-296. Available at: 10.36106/isjr.

Tamunu, S. C., & Rumokoy, F. (2016). The influence of fundamental factors on stock return (Case study: Company Listed in LQ45 2011-2014). EMBA Journal: Journal of Economic Research, Management, Business and Accounting, 3(4), 628-636. Available at: https://doi.org/10.35794/emba.v3i4.11131.

Tawakkal, M., & Sugiyono, S. (2018). Effect of net profit margin, return on investment, earning per share on share return. Journal of Management Science and Research (JIRM), 7(10), 1-15.

Uddin, M. R., Rahman, Z., & Hossain, R. (2013). Determinants of stock prices in financial sector companies in Bangladesh. A study on Dhaka Stock Exchange (DSE). Interdisciplinary Journal of Contemporary Research in Business, 5(3), 471-480.

Vijayakumar, A. (2010). Effect of financial performance on share prices in the Indian corporate sector: An empirical study. Management and Labour Studies, 35(3), 369-381. Available at: https://doi.org/10.1177/0258042X1003500304.

Williams, J. R. (2008). Financial & managerial accounting: The basis for business decisions: McGraw-Hill/Irwin.

Zulkarnaen, A. H., Syamsun, M., & Maulana, T. N. A. (2016). Analysis of fundamental and technical factors to stock price on residential property sector companies listed in Indonesia Stock Exchange. International Journal of Scientific and Research Publications, 6(12), 315-319.

Statistics:

Google Scholor ideas Microsoft Academic Search bing Google Scholor

Funding:

This study received no specific financial support.

Competing Interests:

The authors declare that they have no competing interests.

Acknowledgement:

All authors contributed equally to the conception and design of the study.

Related Article

( 1 ) Impact of Labour, Capital and Human Resources in Productivity of Transport Firms in Nigeria
( 2 ) The Impact of Investment Climate Reforms on the Development of Small and Medium Sized Enterprises in Nigeria: A Policy Brief
( 3 ) The Impact of Human Capital on Economic Growth: Evidence from Tunisia Using Star and Stecm Models
( 4 ) Impact of Food Beverage Price Index and Exchange Rate Volatility on Economic Growth
( 5 ) Impact of Microfinance Lending On Economic Growth of Third world Nations: Study of Nigeria
( 6 ) The Impact of Rice Production, Consumption and Importation in Nigeria: The Political Economy Perspectives
( 7 ) The Impact of Dividend Policy on Shareholders’ Wealth before and After Financial Melt down: Evidence from FMCG Sector in India
( 8 ) Factors Impacting on SMEs Internationalization: Dairy Industry in Zimbabwe
( 9 ) The Life-Time of Tomorrow Party of Japan and Its Negative Impacts on the Anti-Nuclear Movements in Japan’s Politics
( 10 ) An Assessment of the Impact of Information Communication Technology (ICT) On the Administration of Public Records: A Case Study of the Bolgatanga Municipal Assembly in the Upper East Region of Ghana-West Africa
( 11 ) Impact of Inflation on Per Capita Income in Emerging Economies: Evidence from BRICS Nations
( 12 ) The Impact of the Global Financial Crisis on the Debt, Liquidity, Growth, and Volume of Companies in Palestine Stock Exchange
( 13 ) The Impact of the Decline in Oil Prices in Latin America
( 14 ) Measuring the Quality of Islamic Banks Services and Its Impact on Customers Satisfaction A Survey Study on the Islamic Banks Customers in Lattakia-Syria
( 15 ) The Indirect Impact of Overconfidence on the Performance of Tunisian Firms Through their Financing Structure
( 16 ) Impact of FDI on Environmental Quality of China
( 17 ) Panel Data Analysis of the Impact of Economic Freedom as Well as Economic Conditions, The Quality of Life, and Public Education Spending on U.S. Undocumented Immigrant Settlement Patterns
( 18 ) The Role of Social Entrepreneurship in Pakistan and its Impact on Economy
( 19 ) Scenario Economic Impact Analysis of Offshore Fishing Tournaments in Ocean City
( 20 ) Impact of Telecommunications Market Liberalization on Labor Productivity in Economic Community of West African States
( 21 ) Impact of Participatory Decision Making on Organisational Goal Attainment
( 22 ) The Impact of Organisational Culture on Public Sector Performance: A Case Study of Local Authorities in Zimbabwe
( 23 ) An Empirical Assessment of the Impact of Access to Credit on Farm Output: A Case Study of Sefwi-Wiawso Municipality Ghana
( 24 ) An Investigation of the Impact of Organisational Structure on Organisational Performance
( 25 ) Impact of Exchange Rate Fluctuation on Selected Economic Sectors of the Nigerian Economy
( 26 ) Impact of Asymmetric Government Spending on Real Balances Demand
( 27 ) Investigating the Impact of Business Alignment on Job Gratification in an Organization: The Case of a University in Egypt
( 28 ) Impact of Network Finance Development on Inflation: Evidence from Chinese Market
( 29 ) The Impact of Military Spending on Economic Wellbeing in Nigeria
( 30 ) Determinant of MSMEs Performance and its Impact on Province GRDP in Indonesia
( 31 ) Determinants of Financial Performance and its Impact on the Growth of Islamic Bank Assets on Indonesia
( 32 ) The Impact of Land Price Movements on the Properties in Croatia
( 33 ) The Impact of Social Media on Economic Growth: Empirical Evidence of Facebook, YouTube, Twitter and Pinterest
( 34 ) The Impact of Economic Growth, Oil Price, and Financial Globalization Uncertainty on Financial Development: Evidence from Selected Leading African Countries
( 35 ) Impact of Savings on Economic Growth in Africa
( 36 ) An Empirical Analysis of the Impact of Decentralization on Poverty in Cameroon
( 37 ) The Impact of Merger and Acquisition on the Financial Performance of the Nasdaq Listed Small Size Technology Companies
( 38 ) An Empirical Investigation of the Impact of FDI, Export and Gross Domestic Savings on the Economic Growth in Bangladesh
( 39 ) The Impact of Data Frequency on the Level of Exchange Rate Pass-through to Consumer Prices in Nigeria
( 40 ) Analyzing the Impact of Eco-Innovation on Carbon Emissions Abatement: Evidence from OECD Countries
( 41 ) The Impact of Covid-19 Pandemic on the Global Economy: Emphasis on Poverty Alleviation and Economic Growth
( 42 ) Impacts of Domestic Savings and Domestic Investment on Economic Growth: An Empirical Study for Pakistan
( 43 ) The Impact of Trade on Poverty in Sub-Saharan Africa: Do Sources Matter?
( 44 ) The Impact of Fundamental Factors on the Share Price of Micro-Sized Nasdaq Listed Technology Companies
( 45 ) On the OCC Announcement Allowing US Banks to Use Stablecoins and the Immediate Impact on Cryptocurrency Valuations
( 46 ) Impacts of the U.S.-China Trade Conflicts News on U.S. and Chinese Stock Returns
( 47 ) Management of The CFA Franc: What are the Fundamentals of the Real Exchange Rate in West African Economic and Monetary Union (WAEMU)?
( 48 ) International Financial Reporting Standards Adoption and Earnings Management: The Fundamental Effect Framework
( 50 ) External Factors Influencing on Industrial Building System (Ibs) in Malaysia
( 51 ) A Study of Transnational and Transformation Leadership Styles and Factors Affect The Leadership Style
( 52 ) A Theoretical Review on Critical Success Factors (CSFS) of Entrepreneurship Programs in Community College
( 54 ) The Effect of Personal Factors on the Customer Rating of the Quality of Services of the Islamic Banks Operating in the Syrian Coast
( 55 ) A Factor Analysis Approach Towards a Study of the Factors Affecting Students’ Choice of Higher Education Institution: A Case Study of a Private Institution (Twintech International University College of Technology)
( 56 ) Analyzing Factors Affecting the Success of Social Media Posts for B2b Networks: A Fractional-Factorial Design Approach
( 57 ) Effect of Institutional Factors on Foreign Direct Investment in Nigeria
( 58 ) The Effect of Internal and External Factors of Companies on Profitability and its Implications on Stock Price Index of State-Owned Banks
( 59 ) Factors that Influence Profitability of General Insurance Issuers in Indonesia
( 60 ) Factors Influencing Human Capital in Ready Made Garments Industry in Bangladesh
( 61 ) Analysis of the Effects of Pull and Push Factors on Brain Drain: An Example of Turkey
( 62 ) Analysis of Environmental Factors Affecting Manufacturing Small and Medium-Size Enterprises in Kogi State Nigeria
( 63 ) The Effect of Selected Factors on Tax Revenue Mobilization in Ethiopia: The Case of Amhara Region
( 64 ) Factors Affecting the Individual Stock Price Index (IHSI) Industrial Manufacturing Sector in Indonesia, Automotive Sub Sectors, and Components in Indonesia Stock Exchange (IDX)
( 65 ) Factors Influencing on Human Resources Development in SMEs Service Enterprises in Industry 4.0: The Case of Thai Nguyen Province, Vietnam
( 66 ) Factors Affecting the Capital Structure of the Textile Industry in Bangladesh: An Inferential Study
( 67 ) Factors Influencing Audit Expense and Quality in an Emerging Economy: A Study on Bangladesh
( 68 ) The Effect of Disruptive Factors on Inventory Control as a Mediator and Organizational Performance in Health Department of Punjab, Pakistan
( 69 ) Factors Influencing Farmers’ Adoption of Soil Conservation Development
( 70 ) Factors Affecting Profitability of General Insurance Companies in Indonesia
( 71 ) Exploring the Dimensions Using Exploratory Factor Analysis of Disruptive Factors and Inventory Control
( 72 ) Analysis of Demographic Factors on Perceptions of Inventory Managers towards Healthcare Performance
( 73 ) Factors Influencing Profitability of Commercial Banks in Tanzania: A Case Study of CRDB Bank Plc
( 76 ) Share Options, Share Award and Firm’s Performance: Evidence from Malaysian Public Listed Companies
( 77 ) Determinants of Share Price Movement in Nigeria -The Management Perspective
( 78 ) Market Share and Profitability Relationship: A Study of the Banking Sector in Nigeria
( 79 ) Risk Management and Shareholders’ Wealth Maximization
( 81 ) The Relationship Between Market Share and Profitability of Ghanaian Banks
( 85 ) The Effect of Exchange Rate Changes on Consumer Prices in Nigeria: Evidence from VECM Model
( 86 ) Implications of Crude Oil Price Volatility and Parallel Exchange Rate Fluctuation on the Cost of Living in Nigeria
( 87 ) Does Gold Price Lead or Lags Islamic Stock Market and Strategy Commodity Price? A Study from Malaysia
( 89 ) Forecasting Prices of Three Important Agricultural Crops in Bangladesh
( 90 ) Exploring the Asymmetric Linkage between Commodity Prices and Fiscal Performance in Nigeria
( 91 ) Exchange Rate Pass-through to Prices: VAR Evidence for Albania
( 94 ) The Effects of Visual Merchandising and Price Sensitivity on Impulse Purchase Behaviour among Young Apparel Shoppers in Bangladesh
( 96 ) Exchange Rate Volatility and Agricultural Commodity Prices i Nigeria (2000-2018)
( 98 ) Income Shocks and Child Mortality Rates: Evidence from Fluctuations in Oil Prices