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Fundamental Analysis

A method of evaluating a security to measure its intrinsic value by examining related economic, financial, and other qualitative and quantitative factors.

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Fundamental analysis is a technique for predicting stock price movements through in-depth review of economic, financial, and other relevant data. Analysts evaluate macroeconomic indicators (economy, industry conditions) and microeconomic factors (company management effectiveness) to determine a security's value. This value is compared to the current price to decide on a trading strategy (buy if underpriced, sell if overpriced). The method contrasts with technical analysis, which looks primarily at price history and trends rather than company value.
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