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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