In making
investment decisions, a person who analyzes the facts affecting a company's underlying
value. Examples of factors considered by fundamental analysts 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.