12 Fundamental Analysis Fundamental Analysis (FA) is a technique of assessing the intrinsic worth of security by analyzing relevant economic and financial variables. Fundamental analysts research everything that may affect the importance of stock market security. The study components range from macroeconomic indicators such as the economic situation and the circumstances of industry, and microeconomic variables such as the performance of the company’s management. The final goal of FA is to get at a number which an investor can equate to the current price of the security and determine whether the security is correctly valued, undervalued, or overvalued. All stock analysis attempts to assess whether the security is correctly priced in the overall market. This analysis is generally performed from a macro to a micro context to identify securities that have not been valued correctly by the market. The analysts often research to assess the general economic situation and the performance of the particular sector, before focusing on the output of the specific company to obtain a reasonable market value for the portfolio. The fundamental analysis utilizes public information to determine the worth of a stock and other forms of security.