Fundamental analysis
Fundamental analysis involves identifying the ‘value’ or ‘growth’ proposition of a stock using a range of methods. This approach endeavours to understand the fundamental drivers of this stock, analysing factors such as the company’s operations, the market in which it operates and general economic issues, in order to understand the stability and growth potential of a company.

Quantitative analysis
Investing has developed a quantitative approach, much like a ‘health check’ that looks for certain characteristics of out-performing stocks such as:

* an experienced management team
* strong cash flows and profit margins
* attractive financial performance ratios
* sector comparisons

The balance sheet can provide a measure of historical performance on key quantitative data that we use to analyse the stock. Historical performance is often compared against the current performance to pick up any signs of ‘out performance’.

Every stock has a different story and the key share price drivers identified in the fundamental & quantitative analyses determine whether it is a growth or value story.

Some of the key factors addressed in our reports include:

Revenue & Profitability
All revenue & profitability calculations are based on the last 3 years of available data.

To fully comprehend and accurately analyse the data included in the Revenue & Profitability table, it’s important that you understand the terms of each entry.

How each of the elements that make up the Revenue & Profitability table are calculated, and hints on how to track figures over the 12-month are summarised below.

Sector comparison
A comparison against the sector is the last fundamental analysis undertaken to determine the stock’s value. In our reports we summarise key ratio’s and performance indicators, compared to the sector average on rolling 12 month period.

Ratio Calculations and indicative behaviours
A few of the most common key ratio’s, how they are calculated and some ‘hints’ they may indicate are,