Question On Fundamental Analysis...Please Help.
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Hihi....
Could I ask something..?
How to do fundamental analysis?
I read that it's :
'A method of evaluating a stock by attempting to measure its intrinsic value. Fundamental analysts study everything from the overall economy and industry conditions, to the financial condition and management of companies.
In other words, fundamental analysis is about using real data to evaluate a stock's value. The method uses revenues, earnings, future growth, return on equity, profit margins and other data to determine a company's underlying value and potential for future growth.'
Then I read some more, they include datas like 'annual and quarterly report, management discussion and analysis, auditor's report, balance sheet, income statement, statement of cash flow, notes to the financial statements, earnings multiples such as P/E ratio, discounted cash flow, book value, dividend yield analysis.'
So....my question is....how to digest so many of them leh?
Just pick a few important ones?
And, how to digest general economic and/ or industrial sector analysis?
It seems so difficult and use a little fuzzy logic. Then somemore must compare with current stock price to know if it's undervalued or overvalued. -
Anybody can help??? Me are also trying very hard to figure it out..Originally posted by Li Ka Shing:Hihi....
Could I ask something..?
How to do fundamental analysis?
I read that it's :
'A method of evaluating a stock by attempting to measure its intrinsic value. Fundamental analysts study everything from the overall economy and industry conditions, to the financial condition and management of companies.
In other words, fundamental analysis is about using real data to evaluate a stock's value. The method uses revenues, earnings, future growth, return on equity, profit margins and other data to determine a company's underlying value and potential for future growth.'
Then I read some more, they include datas like 'annual and quarterly report, management discussion and analysis, auditor's report, balance sheet, income statement, statement of cash flow, notes to the financial statements, earnings multiples such as P/E ratio, discounted cash flow, book value, dividend yield analysis.'
So....my question is....how to digest so many of them leh?
Just pick a few important ones?
And, how to digest general economic and/ or industrial sector analysis?
It seems so difficult and use a little fuzzy logic. Then somemore must compare with current stock price to know if it's undervalued or overvalued.
But there always no answer... except...... Answer: how your luck today? -
Well, you can start of by learning economics
Anyway, when using FA, you do not necessary have to study everything. For me, I will scan the annual repots and the financial statements of the company. This is to help you get a good grasp on what sort of company you are going to invest in. -
ask a random little girl on whether which stock is good den buy dat one lo
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OK thanks....Originally posted by shade343:Well, you can start of by learning economics
Anyway, when using FA, you do not necessary have to study everything. For me, I will scan the annual repots and the financial statements of the company. This is to help you get a good grasp on what sort of company you are going to invest in.
So, do u choose only the big/ blue chips ones? I mean, cant possibly read all the annual reports from hundreds/ thousands of companies right? How do u filter which ones u want to focus in?
And then....after u read them, how do u determine whether the current stock price is undervalued or overvalued? What criterias make u decide to invest? Is being under/ over valued a criteria? -
Lets say you see a share on the market and you like the name. You do some light reading on the company and you like their Business. So you think its a good company and you want to invest in it. But you need more info.Originally posted by Li Ka Shing:OK thanks....
So, do u choose only the big/ blue chips ones? I mean, cant possibly read all the annual reports from hundreds/ thousands of companies right? How do u filter which ones u want to focus in?
And then....after u read them, how do u determine whether the current stock price is undervalued or overvalued? What criterias make u decide to invest? Is being under/ over valued a criteria?
So you go and read the annual report of the company. Be sure to check the balance sheets and analyse all financial statements. You may also like to know how much the directors are paid. I wouldnt invest in a company that pays their director(s) fat salaries unless its justifiable.
Things to look out for are the company's revenues, assets, earnings per share, debt...etc etc.
After that, if you need more info, you read the business times or whatever business periodicals to give you an idea of which direction the company's industry is heading.
That is what fundamental analysis is all about. The above is not exhaustive, there are many other ways to approach it as well.