Fundamental analysis

Fundamental analysis is one of two primary methods for analyzing a stock's potential return.

It involves assessing a corporation's financial history and current standing, including earnings, sales, and management. It also involves gauging the strength of the corporation's products or services in the marketplace.

A fundamental analyst uses these details as well as the current state of the economy to assess whether the stock is likely to increase or decrease in value in the short- and long-term. He or she also decides whether its current price is an accurate reflection of its value.