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    Fundamental Analysis

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    Atharva Orpe
    1) Choose stocks based on fundamental analysis of the company's numbers and technical analysis of price charts. Diversify investments across different stocks. 2) Key fundamentals to analyze include P/E ratio compared to sector peers, earnings per share, and growth over 3 years. A lower P/E ratio with high EPS growth is preferred. 3) Additional metrics like PEG ratio, which considers growth rate, can help determine if a stock is undervalued or overvalued. A PEG ratio below 1 indicates a stock may be undervalued.

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    Fundamental Analysis

    Uploaded by

    Atharva Orpe
    41 views6 pages
    1) Choose stocks based on fundamental analysis of the company's numbers and technical analysis of price charts. Diversify investments across different stocks. 2) Key fundamentals to analyze include P/E ratio compared to sector peers, earnings per share, and growth over 3 years. A lower P/E ratio with high EPS growth is preferred. 3) Additional metrics like PEG ratio, which considers growth rate, can help determine if a stock is undervalued or overvalued. A PEG ratio below 1 indicates a stock may be undervalued.

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    1) Choose stocks based on fundamental analysis of the company's numbers and technical analysis of price charts. Diversify investments across different stocks. 2) Key fundamentals to analyze include P/E ratio compared to sector peers, earnings per share, and growth over 3 years. A lower P/E ratio with high EPS growth is preferred. 3) Additional metrics like PEG ratio, which considers growth rate, can help determine if a stock is undervalued or overvalued. A PEG ratio below 1 indicates a stock may be undervalued.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    41 views6 pages

    Fundamental Analysis

    Uploaded by

    Atharva Orpe
    1) Choose stocks based on fundamental analysis of the company's numbers and technical analysis of price charts. Diversify investments across different stocks. 2) Key fundamentals to analyze include P/E ratio compared to sector peers, earnings per share, and growth over 3 years. A lower P/E ratio with high EPS growth is preferred. 3) Additional metrics like PEG ratio, which considers growth rate, can help determine if a stock is undervalued or overvalued. A PEG ratio below 1 indicates a stock may be undervalued.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 6

    How to choose stocks?

    Choose a good stock : Fundamental


    Buy the stock at a good price : Technical
    Diversification

    1 Fundamentally:
    As a consumer
    As an analyst : analyse companies numbers

    2 Technically:
    Analyze charts

    3 Diversification
    PE and EPS

    The stock price is the function of its earning or profits.


    Higher the earning or profits, the better.

    Basic EPS = (Net profit - Preferred Dividends) / No. of outstanding shares

    P/E:
    You get to know how much price you are ready to pay per Re. 1/- earning for a share.
    You get to know which company is better valued

    P/E = Price of the stock / EPS

    How to find the best company in valuation?


    1 Compare with P/E of peer companies of the same sector. Never compare with companies of oter sector.
    2 Compare with sector P/E

    Points to note while finding correct valuation of a company?


    1 P/E Ratio (should be less than sector and peers)
    2 Present and Past growth of at least 3 years. (should be high)
    3 Future growth potential(should be clear)
    Face Value, Book Value, Market Value & Market Cap

    1) Face Value is the price of the share which comes into existence with the company and is incorporated on the certificates.
    FV does not change during its lifetime except during share splits
    Face Value = Capital raised by promoters / No. of outstanding shares.

    2) Book Value per share is the total equity with the company.
    BV per share = (Assets - Liabilities) / No. of outstanding shares
    BV per share = (ESC + Reserves) /No. of outstanding shares

    3) Market value (MV) = LTP X No. of outstanding shares


    MV can be more or less than its BV

    Why to people pay more than BV ?


    Future growth potential
    Perception of company is good
    Management and leadership is trustworthy
    Business model is unique ( monopolistic)

    * COMPARE MARKET PRICE AND BV on moneycontrol app to understand the fundamentals of the company and premium v

    Pro tips:
    For long term, invest in asset light model companies
    The value of depreciation of asset is less
    Changes is inventory is less frequent
    Asset light businesses have higher P/BV ratio
    Eg: Software, Marketing, Digital marketing
    TCS, HUL, Info Edge
    orporated on the certificates.

    of the company and premium valuation


    PEG Ratio

    It does not mean that a company with higher P/E is not good.

    PEG Ratio is P/E Ratio + Growth rate

    PEG Ratio = P/E ratio / EPS Growth rate

    PEG < 1 Undervalued, growth is more and better


    PEG = 1 Fairly valued
    PEG > 2 Overvalued (strong SELL)
    PEG < 0.5 Cheaper ( strong BUY)

    * Compare the growth rate % with the P/E


    * Check PE ratio and EPS growth % in tickertape in growth view.
    * Take data of past 2-3 years for real value of PEG ratio
    ROE & ROCE

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