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Fundamental analysis evaluates a stock’s value through a deep dive into economic, financial, and qualitative factors. It’s about:
Valuation: Is the stock overpriced, underpriced, or fairly priced compared to the market price? This will guide your investment decisions.
Financial Health Check: Looking at financial statements (income statements, balance sheets, and cash flow statements) to see how profitable, liquid, and stable a company is.
Growth Potential: Looking at the company’s business model and market position to see the future growth.
Economic and Industry: Understanding macro and industry factors that can impact performance, market conditions, and regulatory environment.
Long-term Planning: Prioritising fundamental over short-term market noise.
In the end, fundamental analysis helps you make decisions based on the company’s real value and potential.
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