Introduction to Fundamental & Technical Analysis

Transcription

1 Introduction to Fundamental & Technical Analysis

2 Introduction X` Examples & Resources Fundamental Analysis Introduction to TA

3 What is Fundamental Analysis? FA vs TA Importance of Fundamental Analysis What is Fundamental Analysis? Evaluation of a company s business through analysing its financial statements, management, competitors and other macro economic factors.

4 What is Fundamental Analysis? FA vs TA Importance of Fundamental Analysis Fundamental Analysis Focuses company analysis to eventually find an intrinsic value for the business. Analysis of financial statements and valuation techniques are important. Holding period is usually mid to long term. Technical Analysis Focuses on using past data and charts to identify patterns and trends. The understanding of indicators and candlesticks is important. Holding period is usually short to mid term.

5 What is Fundamental Analysis? FA vs TA Importance of Fundamental Analysis Importance of Fundamental Analysis Understand the risk that you are taking. Stay committed to your investments regardless of volatility in the market.

6 Introduction X` Examples & Resources Fundamental Analysis Introduction to TA

7 Value Investing Looking for inefficiency in the market whereby companies are valued lower than their intrinsic value. Generally believe that in the long run, its market price and its intrinsic value will converge.

8 Dividend Yield Look out for companies with stable outlook, strong and predictable cash flow to generate dividend consistently.

9 Growth Investing Companies that have huge growth potential to grow and improve earnings exponentially.

10 Top-down Approach Finding and analysing trends in global economic setting. Filtering down to industries or regions with growth potential

11 Bottom-up Approach Looking at individual companies, regardless of economic or industry outlook. Filtering companies using financial ratios or possible company actions.

12 Financial Ratios Gives a quick overview of the financial health of the company and how the market is valuing it 5 types of financial ratios: 1. Liquidity 2. Solvency 3. Efficiency 4. Profitability 5. Market Value

13 Financial Ratios Price to Earnings Ratio Price divided by Earnings per share. Return on Equity net income as percentage of shareholder s equity. Debt to Equity ratio dividing total liability by shareholder s equity.

14 Investment Thesis An investment thesis is essentially the main reason why you chose to invest in the stock. If the investment thesis is breached, the investment will no longer be valid.

15 Introduction X` Examples & Resources Fundamental Analysis Introduction to TA

16 China Minzhong Integrated vegetable processing company based in China. Poor sentiments due to Chinese stocks scandal in Singapore battered its share price down. Strong fundamentals. GIC was its cornerstone investors since IPO. Held for almost 2 years.

17 China Minzhong

18 Hartalega Holdings One of the world s largest gloves manufacturer; notably in nitrile gloves which is high in demand. Strong competitive advantage due to its initial intensive investment into machines to improve efficiency. No debt and strong free cash flow.

19 Hartalega Holdings

20 Tesla Motors

21 Tesla Motors Manufactures and sells electric cars. Unique business strategy. Visionary leader Elon Musk SpaceX, Paypal, Solarcity.

22 Websites Books Others Websites 1. Bloomberg.com 2. Investopedia.com 3. Google.com/finance

23 Websites Books Others Books 1. Contrarian Investment Strategies David Dreman 2. Applied Equity Analysis James R. English 3. The Intelligent Investor Benjamin Graham 4. The Black Swan Nassim Taleb 5. The Alchemy of Finance George Soros

24 Websites Books Others Others Bloomberg Terminal NUS Investment Society s Workshop

25 Websites Books Others Others NUS Investment Society s Workshop

26 Introduction X` Examples & Resources Fundamental Analysis Introduction to TA

27 X` Introduction to TA