What is stock analysis and how do you do it?
Fundamental analysis
As its name suggests, fundamental analysis focuses on the foundation of a company’s financial standing. That means reviewing a company’s financial statements and public filings to assess its financial health to decide if it’s potentially overvalued or undervalued. An overvalued stock is considered “expensive,” because its price exceeds its fundamental value—think of a sweater with a hefty price tag at a boutique. An undervalued stock could be seen as a “bargain,” or that same sweater on a sale rack down the street.
Fundamental analysis is used to determine the fair value of a company’s stock price given its recent earnings, past growth rates, the…
