The Very Basic of Fundamental Analysis

³ Fundamental Analysis

³ The Very Basics

³ Fundamentals: Quantitative and Qualitative

³ Quantitative Meets Qualitative

³ The Concept of Intrinsic Value

³ Criticisms of Fundamental Analysis

³ Business Model

³ Competitive Advantage

³ Management

³ Conference Calls & Management Discussion and Analysis (MD&A)

³ Ownership and Insider Sales & Past Performance

³ Corporate Governance

³ Financial and Information Transparency & Stakeholder Rights & Structure of the Board of Directors

³ Customers & Market Share

³ Industry Growth & Competition

³ Regulation


3. Ownership and Insider Sales

Just about any large company will compensate executives with a combination of cash, restricted stock and options. While there are problems with stock options, it is a positive sign that members of management are also shareholders. The ideal situation is when the founder of the company is still in charge. Examples include Bill Gates (in the '80s and '90s), Michael Dell and Warren Buffett. When you know that a majority of management's wealth is in the stock, you can have confidence that they will do the right thing. As well, it's worth checking out if management has been selling its stock. This has to be filed with the Securities and Exchange Commission (SEC), so it's publicly available information. Talk is cheap - think twice if you see management unloading all of its shares while saying something else in the media.

4. Past Performance

Another good way to get a feel for management capability is to check and see how executives have done at other companies in the past. You can normally find biographies of top executives on company web sites. Identify the companies they worked at in the past and do a search on those companies and their performance.


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