What is Fundamental Analysis

thanks Mohan,

I had a question.. this may sound most basic but I m a beginer in the trade..

How does the EPS affect stock price?.. Does it get added in stock price? I assume the stock price is regulated by demand and supply .. What are the
factors that regulate the stock price?

Sometimes I fail to understand some companies have so low EPS and the astronomical rise in their prices way beyond my understandings .

Pls enlighten us

Thanks in advance
Shirish.

Hi smatrix. I suggest you read this article on Forces That Move Stock Prices!

Thanks a lot RajK, It helped a lot..

Thanks,
Shirish.

guyz,
just went through this page & one thing i noticed that you all did noy interpreted the P/E ratio properly

the actual is MktPrice/EPS


So when is MPS is high youe PE will also be hign so if high levels of speculation exists in any stocks like it happened penny stocks then PE is USELESS...

Can any one help to understand ratio such as
Price to Earnings Ratio P/E
Projected Earning Growth PEG
Price to Sales P/S
Price to Book P/B
Dividend Payout Ratio
Dividend Yield
Book Value
Return on Equity

How do they help to value and how to use it to select whether company is worth investing at currnt market price.

investopedia has explanations i believe for most of your requested material.. just have a good look around the site....
p.s hey to all here. .this is my first post .. looking fwd to some good reading material to help me on my learning curve ver ynew to stocks so all help is appreciated...

I heard Rakesh junjhunwala on CNBC saying, 'P/E ratio is hundered percent
Art and zero percent scince'. If so how will you pick stocks?

Hello Mr.Mohan,
its nice to see this article,very educative and informative.
Please also check my post:- TIME FOR CAUTION.
hope you will like it and will post your comments about it.
Awaiting your reply.
gaurav sapra
[email protected]

Exactly what we need to identify the value shares...is there any body who can point to a reliable resource to identify the above indicators?

Thank you

If one could work out a formula to give you a concrete answer on a stock, the markets wouldnt exist and money wouldnt change hands. Bottomline is recognition and understanding comes via experience and after years of trading. Beyond the figures and the analysis one has to trust one s gut, and take calculated risks. That in my opinion is the only way to understand the share pr movements.