FUNDAMENTAL ANALYSIS

What is Fundamental Analysis?

Fundamental Analysis is analysis that we perform when attempted to determine the overall value of a company as an investment. We look at key metrics included, Price to Sales ratio, Price to earnings ratio, earnings, revenue, debt, earnings per share from quarter to quarter and much more.

 

FUNDAMENTAL ANALYSIS LITE

This is a very basic break down of fundamental analysis but at the bare minimum you need to do this to every stock you put your money into. Look at the Revenue vs Debt, P/E Ratio and Price to Sales ratio BEFORE you look at that graph. You going to want to also look into the stock understand the competitors, who's the CEO, what been going on with the company, lawsuits, publics opinion, wallstreet's opinion etc. But before you get to that level at least look at these 2 metics.

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P/E RATIO (PRICE TO EARNINGS RATIO)

The price to earnings ratio is literally the price of the stock divided by the companies earnings. The number is often called a multiple. You might hear the phrase "times earnings" to describe it. But basically the lower the number the better. Any number OVER 25 is crazy  overvalued. If the company doesn't have a P/E ratio its because that company doesn't have earnings and is not green on the bottom line. Check the price to sales ratio. Or at that point just message me in the discord channel and Ill break it down for you.

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PRICE TO SALES RATIO

This ratio is pretty much what it sounds like. Just like P/E ratio any number OVER 15 is crazy overvalued. You really want a price to sales of 4 but under 8.