Fundamental Analysis

Description of Fundamental Analysis. Explanation.

Definition Fundamental Analysis. Description.

Fundamental Analysis is the research and examination process that tries to determine the intrinsic value of a company or security through an evaluation of its financial statements and other underlying factors to predict future price trends. This research process can also be conducted for an industry, market, or the entire economy. Usually long-term oriented.

As far as analyzing a company is concerned, it attempts to analyze the company's operations and strategy and the market in which the company is operating to understand the status and growth potential of the company. Typical factors to consider include: assets, revenues, earnings, products, management, markets, economy,  and risk.

As a general rule of thumb, a security should be bought if the market price is lower than its intrinsic value. On the other hand, the stock should be sold if the market price exceeds its intrinsic value.

Compare with: Technical Analysis  |  Investor Sentiment  |  Market Perform  |  Cognitive Bias  |  Discounted Cash Flow  |  Economic Value Added  |  Market Value Added  |  Index Fund  |  Mutual Fund  |  Buy-Side Analyst  |  Sell-Side Analyst  |  Qualitative Investment Analysis  |  Quantitative Investment Analysis

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End of description Fundamental Analysis. An explanation.