Investology

Fundamental Analysis Basics

When it comes to stock investing, people usually make use of certain methods that they think will help them find stocks that are worth investing. In general, there are different methods that most people use find  attractive stocks to buy and invest in. One of them is fundamental analysis.

What Is Fundamental Analysis?

Fundamental analysis is a method that involves evaluation of a certain stock by means of estimating its value through analyzing the characteristics of a company. Fundamental analysis delves heavily in evaluating the company behind the stocks. They look into whether the company that a certain stock represents is considered financially strong and stable.

Company Behind The Stocks

In fundamental analysis, the very basic means to determine stock value is by studying the fundamental health and condition of the company. It involves looking into the company’s revenue, its assets, liabilities, its capital expenditures, and other factors that affect the company’s financial aspects. What the analysts are looking for based on the data they collec will help them provide valuable insight as to the future performance of the company behind the stock.

Industry At Large

Not only that, fundamental analysts also aim get some insights of certain stocks by looking into the industry at large that the company belongs to. Information collected can help analysts get a deeper understanding of a company stock’s future based on its financial health and status in the industry it belongs to. Analysts can all learn about the company’s competition, market share, customer volume and quality, as well as industry growth. All these factors can help provide analysts with a better insight of the stock’s fundamental future in the market.