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 ?
The evidence of his study resulted on the effectiveness of the fundamental analysis strategy to differentiate value firms is greatest in slow information-dissemination environments.
This study begins by describing the general framework for evaluating entrepreneurial/speculative actions and then proceeds to a brief description of fundamental analysis. Next, an example is provided to help describe the basic processes involved in performing a fundamental analysis of common stock.
Fundamental analysis views an economy and its currency through economic statistics.
Fundamental analysis avoids market timings and focuses more on investment discipline.
Case studies tackled were based on the Bahrain and other Arab capital markets, as well as the New York Stock Exchange (NYSE) and the National Association of Securities Dealers (NASD), equity and non-equity options, technical and fundamental analysis.
Long-term: Multiple quarters (years)--Based on the idea that the company business will grow and operating model will expand, causing increased company value; fundamental analysis is the preferred strategy.
We could expect fired interest in precious metals to continue as long as the fundamental analysis stays positive and returns remain high relative to other investment opportunities.
Active security selection usually involves fundamental analysis, technical analysis, or both.
A quantitative management approach actually combines the benefits of fundamental analysis with the speed and accuracy of computer-based mathematical models.
He starts with a fundamental analysis of a company's value, which focuses on the firm's ability to innovate, cut costs, and deliver market share.
He touches on technical and fundamental analysis, the efficient market hypothesis, behavioral theories, game theory, risk and diversification, and chaos and complexity theory.
Experts believe such a move would immediately coerce Aer Rianta into a fundamental analysis of its own cost structures.