Fundamental Analysis
Applying Fundamental Analysis: Value Investing
As you may be able to tell from the focus of my recent posts, I’ve been bitten by the value bug. After suffering a string of losses as a result of poor discipline and a several poor trading weeks, I came to the realization that I would feel much more comfortable investing in stocks with [...]
read more »Financial Analysis: Liquidity Ratios
Last we mentioned fundamental analysis, we discussed profitability ratios, a way to measure how well a company makes money. Today, we look at liquidity ratios as a way to use financial statements to glean information on how well a company can pay its short-term bills. The three most common of these ratios are the current [...]
read more »Fundamental Analysis: Profitability Ratios
Now that we’ve gone through the basics of lookings at financial statements and valuation, we can go back to ratio analysis which I attempted to write about in the first Fundamental Analysis series and failed badly at. We’ll take it a bit slower this time and try to be a bit more methodical. We’ve actually [...]
read more »Fundamental Analysis: Valuation
Valuation. Isn’t that something that financial geniuses do? Isn’t valuation for super-cool i-bankers and big shot investors? Doesn’t it take time and expertise that the average Joe just can’t commit? No, no, and… no. Valuation is really any technique used to determine the price you should pay for something. In the realm of stocks or [...]
read more »Fundamental Analysis: It’s Not All About Earnings
The first thing any investor learns about is the importance of earnings to stock prices. The simple reasoning behind this is that a business is ultimately only worth what it can earn after paying down all its obligations. Earnings, however, can be distorted by all sorts of accounting maneuvers – one time events, interest, depreciation, [...]
read more »Fundamental Analysis: Working Capital
Fundamental analysis is a lot more qualitative than technical analysis. As we all know from the Enron scandal, financial statement in and of themselves are subject to the manipulations and approximations of the accountants and auditors who create them. That being said, assuming that the numbers reported are generally correct, it is possible to delve [...]
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