Fundamental process in brief

Fundamental research forms the basis of the fundamental approach to investing. Although it can be organized in many ways, fundamental research often begins with the analysis of a company’s financial statements. Through such an analysis, this approach seeks to obtain a detailed understanding of the company’s current and past profitability, financial position, and cash flows.

Along with insights into a company’s business model, management team, product lines, and economic outlook, this analysis provides a view on the company’s future business prospects and includes a valuation of its shares.  Do the current market valuation of that company’s share correctly reflect the true value of that business, in the opinion of the assessor /analyst.