Fundamental analysis of Equity.

 

What is fundamental analysis?

Fundamental analysis is a method of evaluating the intrinsic value of an asset and analysing the factors that could influence its price in the future. This form of analysis is based on external events and influences, as well as financial statements and industry trends.

Fundamental analysis is one of two major methods of market analysis, with the other being technical analysis. While technical traders will derive all the information they need to trade from charts, fundamental traders look at factors outside of the price movements of the asset itself.

Examples of fundamental analysis

There are various tools and techniques that can be used for fundamental analysis, but they have been categorised into two types of fundamental analysis: top-down analysis and bottom-up analysis. Top-down analysis takes a broader view of the economy, starting with the entire market before narrowing down into a sector, industry and finally a specific company. Conversely, bottom-up analysis starts with a specific stock and widens out to consider all the factors that impact its price.

Most fundamental analysis is used for evaluating share prices, but it can be used across a range of asset classes, such as bonds and forex.

The tools that traders might choose for their fundamental analysis vary depending on which asset is being traded. For example, share traders might choose to look at the figures in a company’s earnings report: revenue, earning per share (EPS), projected growth or profit margins. While forex traders may choose to assess the figures released by central banks that allow insight into the state of a country’s economy.

What is fundamental analysis of equity?

Fundamental analysis (FA) is a method of measuring a security's intrinsic value by examining related economic and financial factors. ... The end goal is to arrive at a number that an investor can compare with a security's current price in order to see whether the security is undervalued or overvalued.

The Fundamental Equity team, led by Patrick Kaser, manages value-oriented strategies across the full range of market capitalizations, with a focus on bottom-up analysis to identify companies with overlooked or improving fundamental strength, typically those with industry-leading characteristics as well.

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