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Fundamental
analysis is a stock valuation method that uses financial and
economic analysis to predict the movement of a company's stock price.
The information that is analyzed can include the company's financial
reports, and non-financial information such as estimates of the growth
of demand for competing products, industry comparisons, analysis of the
effects of new regulations or demographic changes, and economy-wide
changes.
A potential (or current) investor uses this type of analysis to examine
a company's financial results, its operations and the market(s) in which
the company is competing to understand the stability and growth
potential of that company. Company factors to consider might include
dividends paid, the way a company manages its cash, the amount of debt a
company has, and the growth of a company's revenues, expenses and
earnings.
Fundamental analysts may enter long or short
positions based on the result of fundamental analysis.
Wikipedia contributors (2006). Wikipedia, The Free Encyclopedia.
http://en.wikipedia.org/w/index.php?title=Fundamental_analysis&oldid=45980295
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