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Digg it UP - What is Fundamental Analysis?
Google is engaged in a war. It is a war on spam. With new strategies and filters ready to put into place, the search engine is adding new firepower to its arsenal almost daily. Webmasters and SEO Consultants alike are terrified; fearing what the future holds for them. But for those of us that believe in the cause, the future isn’t scary. In fact, the future looks very bright.My ten year old son is fascinated with war. He has a dozen buckets full of army men, and makes everything a battlefield—the kitchen, my bedroom, and even the bathroom. He has a new bicycle helmet that’s army green. For Halloween, when other kids were Spiderman and Batman, he was a soldier. H
Identifying Market Share: industry leaders
Picture the sector of the company as a pie. Whoever owns a bigger piece has a bigger market share. A smaller company will have more difficulties competing with a company that holds the majority of market share.
Look to see the rank of your company within the sector. IBO or Investor's Business Daily is
A PDA -- personal digital assistant -- is a system that makes it possible to increase to overall productivity of an organization. A restaurant is only one place where the tool could be used. The introduction of a PDA in a restaurant will impact the organization in various ways.There are many functions and many different PDA’s, a restaurant requires one that uses: A simple product or service catalog An order unit that is able to accept the order of a client A communicating function that delivers the order to the kitchen Billing information that summarizes the order details and send these to the cashierThe PDA will ha
Fundamentals include earnings report, dividends, sales, inventories, profit margins, P/E ratio, market share, etc....
Technical analysis include chart patterns, % change, new highs/lows, breakouts, etc...
In this thread I will be explaining some of the important information for fundamental analysis. While the TRIN, TICK, PC ratio, premium, tape,etc... all give clues about the health of the market, fundamentals provides us information on the health of the company and its sector.
Let's go over a few key data.
1. Market capitalization: number of shares outstanding x share price
This data gives us an idea of the company size. Companies are classified according to its size: small-cap, mid-cap, and large-cap.
2. EPS: Net income or earnings of the company / number of shares outstanding
This data shows us the profitability of a company.
3. P/E Ratio: Last trade price / earnings per share
One of the most important piece of information to determine whether a company is overvalued or undervalued. Useful number to compare the P/E ratio to other companies. A high P/E ration indicates an overvalued company. A low P/E ration indicates a undervalue company. It is important to compare the company you are analyzing to different companies in the same sector.
Other fundamental tools: revenue, price-to-sales, R&D, debt/equity, management effectiveness ratios, cash flow from operations, etc...
When analyzing the company it is important to ask several questions: What type of business is the company in? How do they earn profits? Does the company profit in during an economic expansion or decline? These are just a few questions you need to ask yourself when analyzing a company. For example, oil companies profit when oil prices are high while airline companies struggle with high oil prices. Home building companies do well during an economic expansion because consumers will look to build new homes. During a recession, a company such as Home Depot may profit because consumers can not afford to spend money on a new home and will look for renovation instead.
Identifying Market Share: industry leaders
Picture the sector of the company as a pie. Whoever owns a bigger piece has a bigger market share. A smaller company will have more difficulties competing with a company that holds the majority of market share.
Look to see the rank of your company within the sector. IBO or Investor's Business Daily is
Successful companies are those that can recognize and respond profitably to unmet needs and trends in the macro-environment. Unmet needs always exist. Companies could make a fortune if they could solve any of these problems: a cure for cancer; chemical cures for mental diseases; non-fattening tasty nutritious food; and practical electric cars. However, during the last decade, cross-border economic transactions have increased in scope (stretching) and intensity (deepening). This applies to trade flows, investment flows and financial flows, but also to flows of services, technology, information and ideas across national boundaries. Interdependence, among countries within the glob
Let's go over a few key data.
1. Market capitalization: number of shares outstanding x share price
This data gives us an idea of the company size. Companies are classified according to its size: small-cap, mid-cap, and large-cap.
2. EPS: Net income or earnings of the company / number of shares outstanding
This data shows us the profitability of a company.
3. P/E Ratio: Last trade price / earnings per share
One of the most important piece of information to determine whether a company is overvalued or undervalued. Useful number to compare the P/E ratio to other companies. A high P/E ration indicates an overvalued company. A low P/E ration indicates a undervalue company. It is important to compare the company you are analyzing to different companies in the same sector.
Other fundamental tools: revenue, price-to-sales, R&D, debt/equity, management effectiveness ratios, cash flow from operations, etc...
When analyzing the company it is important to ask several questions: What type of business is the company in? How do they earn profits? Does the company profit in during an economic expansion or decline? These are just a few questions you need to ask yourself when analyzing a company. For example, oil companies profit when oil prices are high while airline companies struggle with high oil prices. Home building companies do well during an economic expansion because consumers will look to build new homes. During a recession, a company such as Home Depot may profit because consumers can not afford to spend money on a new home and will look for renovation instead.
Identifying Market Share: industry leaders
Picture the sector of the company as a pie. Whoever owns a bigger piece has a bigger market share. A smaller company will have more difficulties competing with a company that holds the majority of market share.
Look to see the rank of your company within the sector. IBO or Investor's Business Daily is
There are probably thousands of articles on the Internet that tackles the same topic as your website or blog. In order to get the attention of Internet users, which are not only fickle minded but also have short attention span, you need the help of a prolific web copywriter. You need someone who knows how to attract the attention of possible customers and probably help in getting things get sold.However, finding a good copywriter on the Internet is as difficult as finding a needle in a haystack partly because there are over thousands of aspiring web copywriters from all over the world. Furthermore, most of the cyber writers out there are neophytes in the business and are
This data shows us the profitability of a company.
3. P/E Ratio: Last trade price / earnings per share
One of the most important piece of information to determine whether a company is overvalued or undervalued. Useful number to compare the P/E ratio to other companies. A high P/E ration indicates an overvalued company. A low P/E ration indicates a undervalue company. It is important to compare the company you are analyzing to different companies in the same sector.
Other fundamental tools: revenue, price-to-sales, R&D, debt/equity, management effectiveness ratios, cash flow from operations, etc...
When analyzing the company it is important to ask several questions: What type of business is the company in? How do they earn profits? Does the company profit in during an economic expansion or decline? These are just a few questions you need to ask yourself when analyzing a company. For example, oil companies profit when oil prices are high while airline companies struggle with high oil prices. Home building companies do well during an economic expansion because consumers will look to build new homes. During a recession, a company such as Home Depot may profit because consumers can not afford to spend money on a new home and will look for renovation instead.
Identifying Market Share: industry leaders
Picture the sector of the company as a pie. Whoever owns a bigger piece has a bigger market share. A smaller company will have more difficulties competing with a company that holds the majority of market share.
Look to see the rank of your company within the sector. IBO or Investor's Business Daily is
Those that were around for the beginning of the world wide web will remember that the groundbreaking concept that fueled its explosion was the hyperlink. The hyperlink seems commonplace today, but it is still the glue that holds the internet together.Where would you be if you could not click on a link and get to the information you wanted? At best, you would be looking up addresses in a book and typing them in.The latest buzz on the internet is all audio and video. That is all well and good. But, much of the interactivity of the web is lost in most audio and video applications. You follow a link and either download the file of interest or start to listen and watch
When analyzing the company it is important to ask several questions: What type of business is the company in? How do they earn profits? Does the company profit in during an economic expansion or decline? These are just a few questions you need to ask yourself when analyzing a company. For example, oil companies profit when oil prices are high while airline companies struggle with high oil prices. Home building companies do well during an economic expansion because consumers will look to build new homes. During a recession, a company such as Home Depot may profit because consumers can not afford to spend money on a new home and will look for renovation instead.
Identifying Market Share: industry leaders
Picture the sector of the company as a pie. Whoever owns a bigger piece has a bigger market share. A smaller company will have more difficulties competing with a company that holds the majority of market share.
Look to see the rank of your company within the sector. IBO or Investor's Business Daily is
While it may seem obvious that competition poses a threat to the success of your business many organizations fail to effectively track their competition within the marketplace.This is important for a number of reasons – one (the obvious one) they take possible revenue and secondly they often provide innovations within your marketplace, they expand opportunities and they influence your customers. By doing this competitors constantly force your organization to develop strategies and satisfy customers.Who are your competitors?Identifying your competitors can be more complicated than you initially think and needs to be tackled in a number of w
Identifying Market Share: industry leaders
Picture the sector of the company as a pie. Whoever owns a bigger piece has a bigger market share. A smaller company will have more difficulties competing with a company that holds the majority of market share.
Look to see the rank of your company within the sector. IBO or Investor's Business Daily is a good place for research market leaders and sector strength.
Insider Transactions
Insider buying and selling must be reported to the SEC so this information is readily available to the public. It is always good to know that the CEO of a company has just purchased shares of its company. Why? These people are in the front lines of the company and hold information that the public does not know. If for example, the president, chairman, and directors are selling a significant amount of shares this can indicate a fundamental problem in the company. However, if the selling is small do not be alarmed. They may be selling shares to purchase a new home, new car, or paying for their childrens education.
Generally, you would prefer to own a stock with insiders owning shares. An insider with a large stake in his company is likely to run a company more efficiently than an insider with no stake in his company.
Analyst Ratings
I personally do not pay much attention to analysts ratings. Instead I prefer to do my own research. Here is a ranking of stocks:
1. Strong buy: Indicates a company that will outperform that market over the next 1-2 years.
2. Buy: Indicates a company stock prices will rise.
3. Attractive: Indicates a stock in good value.
4. Accumulate: Indicates an uptrending stock. Analysts recommend investors to buy on the pullbacks.
5. Market outperform: Indicates a stock that outperform the S&P 500.
6. Market perform: Indicates a stock to perform similar to the S&P 500.
7. Market underperform: Indicates a stock to perform less than the S&P 500.
8. Hold: Analysts would not recommend adding new shares. If an investor owns shares in his portfolio an analyst recommends to hold.
9. Avoid: Analyst does not recommend adding any new shares.
10. Sell: Analyst is very negative about a company and recommends a sell.
11. Strong Sell: Indicates a strong fundamental problem with the company.
One important thing to understand is that the analyst maintains a relationship with the company. Many analysts will not issue a sell rating because this will affect their relationship. Instead they may downgrade a stock from market outperform to market perform. Issu
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