Fundamental analysis is the analysis of companies and their performances. Experts typically monitor many factors to determine a company’s performance, though they all have their own preferences on the factors that are the most important. Our observations indicate that the ones chosen as important by many of the experts are:
- long term debt to equity ratio
- growth and consistency of earnings per share
- relative strength versus benchmarks such as the S&P500
- dollar revenues
- the price to earnings ratio (P/E)
- insider holding and recent transactions
- the price of the stock
- the sector or industry that the company is in.
Other fundamental factors the experts look at include
- Average shares outstanding
- Cash and cash equivalents
- Cash Flow from Operations
- Profit Margin
- Current assets / current liabilities
- Earnings
- Revenue to earnings per share ratio
- Income tax percentage
- Institutional ownership
- Inventory to sales ratio
- Long Term debt in relation to current assets
Market Value - Net Profit Margin 3-year average
- PEG ratio (Price/Earnings/Growth of Annual Earnings Per Share)
- Payout Ratio
- Price / Book ratio
- Price / Cash Flow
- Price / Dividend
- Price / R&D
- Price / Sales
- Price performance compared to similar stocks
- Profit Margin
- R&D as a percentage of sales
- Return on equity
- Yield.
Definitions of most of these terms can be found in the glossaries and dictionaries identified in the Introduction section. Typically it is the value, the growth, the consistency, the comparison with a previous period and the comparison to the industry norm that is important in these factors.
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http://www.ac-markets.com/ under its section on Analysis Tools provides an explanation of fundamental and technical analysis and the differences between the two is It also covers technical indicators, economic indicators and has a “Summary of US Reports Watched by the Fundamental Analysts”, in table format.
http://www.allstocks.com/ lists 13 factors is its What the Pros Watch under Education, which is based on a survey by Merrill Lynch that had 122 responses.
http://beginnersinvest.about.com/ has lessons on analyzing a balance sheet and income statement.
http://www.clivemaund.com/ Nigel Maund analyzes the fundamental of several precious metal mining companies. An article on “Fundamental Analysis for the Investor in Gold Mining Stocks” is in Nigel's Corner.
http://www.financegates.com/ has an article titled “Analysis of Financial Information for Stock Valuation” under Stock Brokerage in the Education section where it briefly describes the process of fundamental analysis.
http://www.fool.com/ in its Investor Education section under Investing has many lessons on fundamental analysis including How to Value Stocks and Investing Basics.
http://www.forexnews.com/ provides fundamental and technical analysis education, but related mostly to currencies. It has an article debating the uses of fundamental analysis versus technical analysis, which also points out the roles of expectation and sentiment.
http://www.incrediblecharts.com/ has a list of nearly 50 fundamental questions to ask yourself when considering value investing.
http://www.investopedia.com/ has extensive free education at its site under Tutorials. It covers basic fundamentals, more advanced topics, active trading and special features, such as economic indicators, which, for example, explains what the Beige Book is and who releases it. The article on fundamental analysis has nine sections and deals mostly with financial statement analysis. It also has a weekly newsletter that contains interesting educational articles, typically on fundamental and technical analysis, and retirement accounts.
http://www.investorguide.com/ has a University section. Under Stocks, it has an article that defines fundamental analysis. It goes on to examine some of the fundamental numbers. In the Annual Reports lesson it points out that annual reports should not be read cover to cover. It lists the nine sections in most annual reports and provides guidance on what to examine.
http://www.kiplinger.com/ tells us that there are five key fundamental numbers.
http://www.standardandpoors.com/ explains its equity research methodology in its Equity Research section under Analytical Methodology.
http://www.stocks.about.com/ covers fundamental analysis as well as technical analysis.
http://www.turtletrader.com/ has an article on "Technical v. Fundamental" listed on its Home page.
http://www.valueline.com/ provides fundamental data in its Value Line Investment Survey view of companies in the Dow 30. Look at the Education section for How to Read a Survey page.
http://www.wharton.upenn.edu/ has hundreds of research papers some of which relate to fundamental analysis.
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