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Fundamental Analysis
Choosing what stocks to buy and when to buy them involves following a strategy. One of those strategies is known as fundamental analysis. Traders who use this methodology focus not on the stock, but on the company behind the stock. They determine if the stock is undervalued, overvalued or trading at fair market value by looking at fundamental aspects of the company’s worth. This is sometimes referred to as determining the company’s intrinsic value.

There are several steps to determine a company’s intrinsic value. The trader begins with an analysis of the current and future economic health of the company. Economic health is then evaluated against anticipated changes in both short and long-term interest rates. The trader also needs to examine the sector the company is part of. When examining a sector, the trader is looking to see the maturity of the sector, i.e. is this an industry that is relatively new, or does it have a performance history? The next evaluation is determining what part of the cycle the sector is in, meaning how long has it been profitable/unprofitable. Chances are if the sector has been profitable for a long time, analysts expect a decline in the not too distant future.

The last part of the analysis is to examine the individual firm for factors that give it a competitive edge. The ability to control costs, a good distribution system for products, expertise in the use of technology, experienced management, and the ability to accurately forecast revenue are all considered signs that the company has a high intrinsic value and the stock is worth purchasing. A trader who uses this fundamental analysis approach employs it as part of a larger strategy of investing in a stock long-term, which is commonly referred to as "buy and hold".
08, October 2006
The New Oil Boom
Searching for an investment opportunity that involves oil alternatives is a logical move, but recent studies have shown there are other oil opportunities that could prove to be highly profitable.
24, September 2006
US Congress Approves Oman Trade Pact
In a 63 to 31 vote, the United States Senate put its seal of approval on a free trade agreement with the Arabian Gulf state of Oman.
Symbol Rate
GBP:CHF 1.747703
GBP:JPY 155.484239
GBP:USD 1.638403
NZD:USD 0.627050
EUR:CAD 1.545998
EUR:CHF 1.516857
EUR:GBP 0.867915
EUR:JPY 134.947096
EUR:USD 1.421994
AUD:JPY 76.394373
AUD:USD 0.805000
USD:CAD 1.087204
USD:CHF 1.066711
USD:JPY 94.899879
USD:SEK 7.613010

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