FUNDAMENTAL ANALYSIS OF STOCK MARKET | பங்குச் சந்தையின் அடிப்படை பகுப்பாய்வு

 

WHAT IS A FUNDAMENTAL ANALYSIS? :

Before going deeper the factors that should be considered while doing a fundamental analysis of a stock. In this post, we will see what actually the fundamental analysis is all about.

So, Let me give you a scenario, Suppose you have decided to buy a new smartphone, Initially you would have some idea about the company which you would like to buy. let's say Samsung. Then you will look into the features of the smartphone, its price, its model, its performance, its battery, storage, etc... After that, you will check its competitors whether the same features available in this smartphone is also available on its competitor's smartphone at a better price to buy. After all this, you will decide which smartphone to buy according to your analysis.

In the same way in the Stock Market, Analysing and finding the fair value of a stock is called Fundamental Analysis. Let's see this with an example,

TATA Power company is currently trading at a price of ₹283 per share. Ok, But the value of stock that should be, after the fundamental analysis and finding the Intrinsic value is ₹52.2.  The intrinsic value of an asset can be considered as a measure of its worth. we will see about it later. So, as per the analysis, the intrinsic value of TATA Power is only ₹52.2 but its current share price is ₹283. Since the share price is greater than the intrinsic value TATA power is considered as Over-Valued, as per the analysis.

Intrinsic Value of a stock > Current Market Price of a stock = Under Valued Stock

Intrinsic Value of a stock < Current Market Price of a stock = Over Valued Stock

Using fundamental analysis, you can identify whether the stock you want to buy is undervalued or overvalued. But this is not the only factor that comprises fundamental analysis, Even though it is overvalued, we should also compare the stock with its peers or competitors.

So,  How do we check out the fair price of any company? So there are various methodologies to check out on the fair price by seeing your balance sheet analysis, your ratio analysis, your profit and loss analysis. Before diving deep into the fundamental analysis, we must understand the basics and the goals.

It would be better to know what are all the factors that affect the share price of a company before going to the fundamental analysis of a stock.  Generally, the stock price goes up or down depending on the Supply-Demand chain. More the demand, more will be stock price and more the supply leads to falling.

There are also other factors that affect a stock price, they are:

1. Company's Performance
2. News about the company
3. Market sentiments
4. Economic / Global factors

The company's performance and the news about the company can affect its share price. The factors may be good news from the company like Announcing Dividends, New projects, etc... will make the share price go high. Suppose there is news about the company pledging its shares to merchant banks and taking a loan with it, Poor Quarterly results, increased Debt, etc... seems to be a piece of bad news for the company and will make the share price go down. It is common for the stock prices of companies in the same industry to move together. As a result, companies in the same industry will generally be affected in the same way by market conditions.

Market sentiments are also valuable factors for movement in stock price, market sentiments lead to,

1. Bull Market: stock prices are rising and investor confidence is growing. Economic recovery or an economic boom.
2. Bear Market: stock prices are falling and investor confidence is fading. Economy is in recession.

 There are certain economic factors, which also plays a key role in the movement of share price they are:

1. The value of Currency.
2. Changes in economic policy or Union Budget policy of a country
3. Political events.
4. Inflation & Deflation
5. Change in Interest Rates, etc...

In this post, we have seen more about the fundamental analysis, its goals and the factors affecting the share price of a company. We will see more about the related topics in the upcoming posts.

DISCLAIMER:-

The content of this site is only for educational purpose. I am not SEBI Registered. The motive of this site is to share my knowledge on share market to new budding investors and others who are learning about stock market

My Kind request to my site viewers, Before taking any decision please do self analysis, consult or discuss with Your financial Advisor .

மறுப்பு:-

இந்த தளத்தின் உள்ளடக்கம் கல்வி நோக்கத்திற்காக மட்டுமே. நான் செபியில் பதிவு செய்யப்படவில்லை. இந்த தளத்தின் நோக்கம், பங்குச் சந்தையைப் பற்றிய எனது அறிவை புதிய வளரும் முதலீட்டாளர்கள் மற்றும் பங்குச் சந்தையைப் பற்றி அறிந்துகொள்ளும் மற்றவர்களுக்குப் பகிர்வதாகும்

எனது தள பார்வையாளர்களுக்கு எனது அன்பான வேண்டுகோள், எந்தவொரு முடிவையும் எடுப்பதற்கு முன், சுய பகுப்பாய்வு செய்யுங்கள், ஆலோசனை செய்யுங்கள் அல்லது உங்கள் நிதி ஆலோசகருடன் விவாதிக்கவும்.