Fundamental analysis


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Related to Fundamental analysis: Technical analysis

Fundamental analysis

Security analysis that seeks to detect misvalued securities through an analysis of the firm's business prospects. Research often focuses on earnings, dividend prospects, expectations for future interest rates, and risk evaluation of the firm. Antithesis of technical analysis. In macroeconomic analysis, information such as interest rates, GNP, inflation, unemployment, and inventories is used to predict the direction of the economy, and therefore the stock market. In microeconomic analysis, information such as balance sheet, income statement, products, management, and other market items is used to forecast a company's imminent success or failure, and hence the future price action of the stock.

Fundamental Analysis

In making investment decisions, the analysis of the facts that affect a company's underlying value. Examples of factors considered in fundamental analysis include debt, cash flow, supply and demand for the company's products, and so forth. For instance, if a company does not have a sufficient supply of products, it will fail. Likewise, demand for the product must remain at a certain level in order for it to be successful. Fundamental analysts recommend buying stocks in companies with strong fundamentals because they are essential for long-term success and stability. Fundamental analysis contrasts with technical analysis, which considers primarily short-term indicators. See also: Value Investing.

fundamental analysis

Analysis of security values grounded in basic factors such as earnings, balance sheet variables, and management quality. Fundamental analysis attempts to determine the true value of a security, and, if the market price of the stock deviates from this value, to take advantage of the difference by acquiring or selling the stock. Fundamental analysis may involve investigating a firm's financial statements, visiting its managers, or examining how a particular industry is affected by changes in the economy. Compare technical analysis.

Fundamental analysis.

Fundamental analysis is one of two main methods for analyzing a stock's potential return.

Fundamental analysis involves assessing a corporation's financial history and current standing, including earnings, sales, and management. It also involves gauging the strength of the corporation's products or services in the marketplace.

A fundamental analyst uses these details as well as the current state of the economy to assess whether the stock is likely to increase or decrease in value in the short- and long-term and whether the stock's current price is an accurate reflection of its value.

References in periodicals archive ?
Unlike Technical Analysis, which looks purely at price action and trends, Fundamental Analysis takes on a much more rigorous assessment of an asset, such as a currency or stock index.
In this section, a generalized example of fundamental analysis is presented in order to help clarify how the process works and identify basic tenets relative to a thymologic process.
By integrating financial statement analysis and fundamental analysis the book attempts to create a mechanism of evaluation which is robust on achievements of the past as revealed through accounting principles applied in producing financial statements and also future actions as strategy as anticipated through application of principles of finance.
Approaches examined encompass advanced technical analysis, fundamental analysis, sentiment, and market structure.
In MarketGrader's fundamental analysis, each company is assigned an overall grade and buy, sell or hold rating, compiled from individual indicators across Growth, Value, Profitability and Cash Flow analysis categories so investors can identify companies undergoing structural fundamental changes.
There is also a third option regarding technical and fundamental analysis when it comes to interpreting the spread betting markets.
The company also explains the major disadvantage of fundamental analysis - the fact that past data does not necessarily reflect future price movement.
He uses fundamental analysis and a top-down approach to pick mutual funds for Personal Finance.
uk/cfd-trading/) on technical analysis, fundamental analysis or a combination of the two, ensure that you fully understand the risks involved.
Wasatch Advisors pursues a disciplined approach to investing, focused on bottom-up, fundamental analysis designed to develop a deep understanding of the investment potential of individual companies.
The firm considers fundamental analysis -- conducted by five analyst teams assigned to oversee the 10 market sectors -- the most important part of the investment process.
Bowser has an excellent reputation for using fundamental analysis to discover undervalued stocks and has a loyal following," said Sinnott.