To buy a company’s stock, you should know something about the company. Often, you don’t need to look much further than a company’s financials to determine whether it’s a good fit for your portfolio.
Many stock trading platforms offer tools for conducting fundamental analysis—which is key to figuring out if a company is worth backing.
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Fundamental analysis is a method of valuing a stock based on financial data and the company’s history like its balance sheet, revenue, profitability and earnings per share (EPS). A stock’s price isn’t always an accurate representation of its value.
Some stocks are overvalued—others are undervalued. Fundamental analysis can help you uncover a stock’s true value to identify prime opportunities for long-term growth.
Fundamental analysis is one of two ways to value stocks. The other method—typically employed by active traders—is technical analysis. This form of analysis relies on sophisticated charting tools to analyze a stock’s price history and movement.
Technical analysis can be useful, but is better suited to short-term trades rather than long-term investments.
High-quality tools are the key to well-informed trading decisions. These 5 fundamental analysis tools are ideal for the value investor seeking top-notch data.
Company data goes far beyond its valuation and stock price. To get an accurate picture of a company’s financial health, you need to dig into the details. Consider accessing stats on market research platforms like Finviz, Morningstar and Yahoo Finance. Look for the following metrics:
Get a big-picture overview of market performance with heat lists. These can help you gauge market performance across Canadian, US and international markets in real time. Data is shown in green and red to help you quickly zero in on the type of investment you’re seeking. Browse trade, search and news heat lists to identify stocks with forward momentum.
The market waits for no one—and staying on top of industry-impacting news events is a vital part of value investing. Never miss a beat with market news that’s updated around the clock:
Some research tools allow you to pit 2 or more stocks against each other to directly compare present and historical performance as well as various data points. See how multiple stocks stack up across numerous metrics, including:
If you’re looking for inspiration from the pros, learn from top institutions like Bridgewater Holdings, Soros Holdings, Renaissance Technologies, Capital Research and more by tapping into these companies’ holdings to see which investments may be worth watching.
Consider taking educational courses to grow your knowledge of the following:
Loads of beginner and experienced investors alike use community discussion boards to swap ideas and hunt down promising investments. Connect with fellow traders on active discussion boards to discuss trades, trending topics, market news and strategies with like-minded investors from around the world.
Related: Compare stock brokers
If you’re frustrated by the limited research options offered by beginner investment apps, it may be time to explore a more sophisticated trading platform. The better-informed your trade, the less risk you invite into your investment portfolio. Sign up for a stock trading account today to access all the tools you need to conduct high-quality fundamental analysis.
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