The concept of fundamental analysis

It is a process of evaluating the stock of a selected company in which a trader tries to measure the intrinsic value of the company. It is the most comprehensive type of stock analysis. It focuses on fundamental and important factors of a global, geopolitical, economic, sectoral and corporate nature that can significantly influence the course of development or the aforementioned "intrinsic value of a stock". In this method of analysis, we start by examining the related economic, financial and other qualitative and quantitative factors. In this process, the trader or analyst should analyse everything that can affect the price of the asset in question. This mainly includes macroeconomic factors, microeconomic and other individual specific influences.

The essence of such fundamental analysis is to produce a value that an investor can compare with the current price of the asset in order to determine whether the asset is interesting enough to include in his investment portfolio or whether he would rather avoid it.

Intrinsic value

This is a type of measure of the value of a given asset, or stock if we are talking about a company, where we try to estimate whether it is overvalued or undervalued based on specific factors. We have no set universal standard for the specific calculation of a company's intrinsic value. In principle, however, we can say that intrinsic value can be measured using valuation models.  These are based on aspects of the business that include qualitative, quantitative and perceptual factors.