Fundamental analysis of a stock is used to determine the health of a company. It’s recommended to do a proper fundamental analysis of the stock before investing if you are planning for long term investment.
Technical analysis is good to find the entry and exit time in a stock for Intraday or short term. You can book good profits using different technical indicators.
However, if you want to find a multi bagger stock to invest, then the fundamental analysis is the best tool that you can utilise.
To get multiple times return, you need to remain invested in a stock for long term. While the technical indicators will show you exit signs on short term downtrends, however you can remain invested in that stock if the company is fundamentally strong.
In such cases, you will be confident that the stock will grow and give good returns in the future. Short-term market fluctuations, external factors or mis-happenings won’t affect the fundamentals of the strong company in long term.
In this post, I am going to explain how to do fundamental analysis on stocks. Here, I will elaborate few guidelines that if you follow with discipline, you can easily select fundamentally strong companies.