Fundamental Stock Analysis

  • A fundamental market analysis can help you find quality stocks

  • Fundamental market analysis includes looking at all the fundamentals of a company

  • Technical analysis software can help make your research much easier and simple




1. Look a the earnings per share during the fundamental market analysis. This factor can help indicate the growth rate and profit ability of a company, which will allow you to predict more accurately the future of the company. The earnings per share is found by using the number of common stock shares that are outstanding and dividing these into the companies profits after taxes.

2. Use technical analysis software to help you do the technical analysis faster and more efficiently. There are a number of software programs available that can help you compare and analyze stocks and the market according to the criteria you set. This method is faster and requires less time, because the software program does a lot of the work for you.

3. Stock chart analysis will help you understand the price pattern of the stock, so you can be more accurate in attempts to predicts where the price will go, up or down. Understanding how and why to analyze the the stock chart will help you find the winners in the market, and avoid those stocks that are falling in price.

4. Fundamental trading can be profitable, but you must use caution that only stocks in the same industry are compared against each other. Comparing the fundamentals of two different stocks from different industries will not help you at all, because both stocks must be in the same industry for the comparison to be accurate.

5. Look at the earnings history for at least the last three years whenever possible. Even companies that have only been public a short time should have this information from before the IPO was offered, when the company was private. It may not always be possible to see three years back, but you should at least check the last six quarters of the earnings if three years of earnings history is not available.

6. A fundamental market analysis is all about the fundamentals of the company. Make sure to research all of the information possible on the stock or company because this will give you more information to do the analysis with. You must look at all the factors together to determine the probable future moves of the stock.

7. Look at the sales of the company for at least the last six quarters, and preferably longer. The sales should be growing and expanding over the last four quarters, even if it is by small amounts. Look at the sales for the company four quarters ago and then again today. A good way to determine this factor is to consider whether the sales have risen at least twenty to twenty five percent over the last four quarters.

8. Use technical analysis software together with fundamental market analysis. Combining these two types of analysis when considering stocks can help you see the big picture, instead of little bits and pieces. Fundamental analysis does not happen to a company in a vacuum, so make sure to analyze all the factors and components.

9. Return on equity is an important factor during fundamental market analysis. This component is a sign of the financial performance of the company and stock. Many experts recommend using a return on equity percentage of twenty percent or higher for quality stocks.

10. One of the biggest considerations during the fundamental market analysis should be the product or service offered by the company. Look for stocks in companies which offer products that are new or unique. This creates a higher demand for the product, and raises the potential earnings of the company significantly. These stocks are hidden gems, and smart investors will look for them carefully during the fundamental analysis.

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