Fundamental Stock Analysis Rules

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10 Rules of Fundamental Stock Analysis
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A fundamental market analysis can help you find
quality stocks
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Fundamental market analysis includes looking at
all the fundamentals of a company
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Technical analysis software can help make your
research much easier and simple
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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.
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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.
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3. Stock chart analysis will help you understand
the price pattern of the stock, so you can be
more accurate in attempts to predict where the
price will go, up or down. Understanding how and
why to analyze the stock chart will help you find
the winners in the market, and avoid those stocks
that are falling in price.
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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.
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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.
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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.
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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.
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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.
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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.
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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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