As the name implies, it can be said that fundamental analysis is a fundamental analysis to explore information covering economic conditions, the industry as a whole, and company conditions. This analysis technique tends to consider the company’s performance and projections to estimate stock prices. The initial method commonly used is to first capture stocks that are estimated to have feasibility. This can be done with a top-down step, which is to make observations starting from the macroeconomic conditions, the industrial sector, to the company. Or it could also be done the other way around, termed bottom-up, which is to make observations starting from companies, the industrial sector, to macroeconomic conditions. Investors must understand this if they want to know Como investir na bolsa de valores effectively.
In practice, there are several things that investors must know about the company that issued the shares. Although it can be known through the tables issued by the company, investors can also dig up information about the financial elements and transparency of the company. Financial elements that need to be considered, for example, earnings per share, the book value of equity, the book value of shares, or expense ratios. All of that will later be needed to assess whether the stock is good or bad.
Regarding the transparency of information, the company has prepared it in an annual report. In the report, all company activities are included in one year. However, usually, this annual report is sometimes difficult to understand. In essence, with the annual report, you can learn various things, such as weaknesses in the management structure, earnings information, and similar information.
Tips for Choosing a Good Stock Based on Fundamental Analysis
From the analysis conducted with fundamental analysis, what needs to be considered is the reference to determine the good or bad of the shares. The following are the criteria that can be used as a reference,
The stock has a very huge market capitalization minimum limit.
Issuers that have a clear and good business model.
The company is consistent in increasing earnings/shares from quarter to quarter.
The company does not have a debt that is greater than the Debt Equity Ratio (DER).
Stocks become market leaders.
Average Price Earning Ratio (PER) is not much different.