Fundamental Analysis for Stocks

The fundamental analysis is a method of determining a stock real or fair market value, if the fair market value is higher than market price, then it means stock is under valued.

Fundamental analysis is the art of evaluating any business to its basics and getting a proper picture of the financial health of the company and finding the potential of company's growth by considering all factors.

There are various tools and techniques that can be used for fundamental analysis, to determine the intrinsic value it value give the fair price of the stock. Analyzing the balance sheet and profit and loss account is the key element of the fundamental analysis.

Fundamental analysis has 3 layers, while conducting fundamental analysis start with economic analysis, then industry analysis and then company analysis

The fundamental analysis uses the publicly available financial data to evaluate the value of an investment. They analysis the quarterly and annual reports of the stocks in fundamental analysis, you evaluate a security by using economic, financial, qualitative and quantitative factors to determine its intrinsic value.

It is believed that macroeconomic and microeconomic factors can affect a security's value. These factors can be economic conditions, industry conditions, financial conditions and management's proficiency.

To analysis the historical data need a professional knowledge there are various step like revenue, earning, future growth, ROI, profit margin, cash flow, income statements, qualitative and quantitative analysis and earning per share and the future value.

Determining the value of an asset, so that traders can take a long position and once the trader has determined a numerical value for the stock, they can compare it to the current market price to analysis whether is over or under valued

The fundamental analysis helps traders and investors to gather the right information to make rational decisions about the right price of the stock for entry and exit.

Fundamental analysis is detailed study of stock it takes a long time as compare technical analysis. Is all about focusing on the particular business.

More than five thousand company are listed on BSE and Few are become multi-bagger in future and only the fundamental Analysis help you to finding the right One

The technical analysis is only predicting the short term whereas the fundamental analysis the long-term performance of the stock or security

Fundamental analysis does not give result in short term it takes time for the particular movement it is focus on long term goal whereas technical analysis gives the result only in the short term.

In the fundamental analysis give the details overview of the company pros and cons whereas the technical analysis only gives the direction or movement of the stock.

In some case fundamental analysis does not work properly like economic crisis, fraud, war like situation just because its quickly in the market and whereas the technical analysis give the direction of the market and trader or investor response quickly on these situations.