Fundamental Analysis

Fundamental Analysis
There are two different approaches to the financial analysis of the firm – fundamental analysis and
technical analysis. Fundamental analysis regards quantitative information of the firm such as revenue,
earnings, market share, dividends and debt in order to make a decision about whether to buy (or sell)
shares of the firm. Some fundamental analysts will devote considerable effort to gather extensive data
about a firm and then make a “gut” decision. Some fundamental analysts will create a mathematical
model and weight the various fundamental in order to get a buy/sell result. The underlying assumption
in both cases is that a thorough fundamental analysis is more likely to produce positive results (alpha)
than a technical approach. Rigorous academic studies have shown that there is little evidence that
fundamental analysis consistently produces superior results.
Here are some links to some real fundamental analysis:
Fundamental Analysis of Wendy’s
October Trades
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