There are 9 terms to know in fundamental analysis. Whether you are into fundamental analysis or technical analysis, stock analysis involves evaluating stocks to make informed investment decisions. Fundamental analysis focuses on a company’s financial health and intrinsic value. As such, fundamental analysts search for stocks that are currently trading at prices that are higher or lower than their real value.
Do you know what is intrinsic value? Intrinsic value is the actual value of a company, or an asset based on an underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors. This value may or may not be the same as its current market value. Intrinsic value is a key concept in value investing and is used to determine whether a particular asset is overvalued or undervalued.
There are various methods to calculate intrinsic value, such as discounted cash flow analysis, earnings multiples, and asset-based valuation.
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