Do you invest in equities looking at the stock price or the company? You may argue that both approaches are the same. However, there is a vast difference between these two methods of stock investment. If you invest just looking at the stock price levels and because someone told you that it’s a good buy at those levels, doesn’t always imply that the company has been doing well consistently. What if you invest in some company shares and later realize that the company is having a huge debt and delivering inconsistent results every quarter?
To avoid such a scenario, it is advisable to have relevant details about a company, before you decide to buy it’s shares. Now, fundamental analysis of a company helps you to get detailed information about it in terms of past quarterly results as well as annual results. And you know that a company is doing well, if it’s results are improving every time.
The equity fundamental analysis enables you to understand whether a particular company’s debt is reducing regularly or remaining constant. If the debt is not so high and getting reduced consistently, you can consider that as part of the improving fundamentals of the company. Such an analysis takes into consideration a variety of other parameters such as P/E, EPS, dividend history, bonus / stock split announcements, and more.
Once you get such comprehensive information about a company, it becomes very easy for you to take your buy / sell decision for its shares. As an outsider, how do you get hold of such data about company fundamentals? With a financial services firm like JMFL, you get spoon-fed with this information. They possess a well-qualified team of stock market analysts who perform extensive research about companies and produce relevant reports for you to study as well as understand.
They say “Ignorance is bliss”, but, when it comes to the stock markets, it can prove to be harmful. So, it is better to stay updated about details of a company in whose stocks you are investing! And fundamental analysis of a company helps you to achieve the same.
Author, Suchita Jha is living in India. Suchita Jha is part of our authors community since and has published 1st post.
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