Introduction to Fundamental & Technical Analysis

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X` Introduction

Fundamental Analysis

Examples & Resources

Introduction to TA

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• 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.

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• 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.

Fundamental Analysis Technical Analysis • What is Fundamental Analysis? • FA vs TA • Importance of Fundamental 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.

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Importance of Fundamental Analysis

• Understand the risk that you are taking.

• Stay committed to your investments regardless of volatility in the market.

• What is Fundamental Analysis? • FA vs TA • Importance of Fundamental Analysis

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Fundamental Analysis

Examples & Resources

Introduction to TA

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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.

• Value Investing • Dividend Yield • Growth Investing • Top-down Approach • Bottom-up Approach • Financial Ratios • Investment Thesis

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Dividend Yield

• Look out for companies with stable outlook, strong and predictable cash flow to generate dividend

consistently.

• Value Investing • Dividend Yield • Growth Investing • Top-down Approach • Bottom-up Approach • Financial Ratios • Investment Thesis

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Growth Investing

• Companies that have huge growth potential to grow and improve earnings exponentially.

• Value Investing • Dividend Yield • Growth Investing • Top-down Approach • Bottom-up Approach • Financial Ratios • Investment Thesis

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Top-down Approach

• Finding and analysing trends in global economic setting.

• Filtering down to industries or regions with

growth potential

• Value Investing • Dividend Yield • Growth Investing • Top-down Approach • Bottom-up Approach • Financial Ratios • Investment Thesis

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Bottom-up Approach

• Looking at individual companies, regardless of economic or industry outlook.

• Filtering companies using financial ratios or

possible company actions.

• Value Investing • Dividend Yield • Growth Investing • Top-down Approach • Bottom-up Approach • Financial Ratios • Investment Thesis

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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

• Value Investing • Dividend Yield • Growth Investing • Top-down Approach • Bottom-up Approach • Financial Ratios • Investment Thesis

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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.

• Value Investing • Dividend Yield • Growth Investing • Top-down Approach • Bottom-up Approach • Financial Ratios • Investment Thesis

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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.

• Value Investing • Dividend Yield • Growth Investing • Top-down Approach • Bottom-up Approach • Financial Ratios • Investment Thesis

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X` Introduction

Fundamental Analysis

Examples & Resources

Introduction to TA

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China Minzhong

• Value Investing • Dividend Yield • Growth Investing • Top-down Approach • Bottom-up Approach • Financial Ratios • Investment Thesis

• 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.

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China Minzhong

• Value Investing • Dividend Yield • Growth Investing • Top-down Approach • Bottom-up Approach • Financial Ratios • Investment Thesis

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Hartalega Holdings

• Value Investing • Dividend Yield • Growth Investing • Top-down Approach • Bottom-up Approach • Financial Ratios • Investment Thesis

• 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.

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Hartalega Holdings

• Value Investing • Dividend Yield • Growth Investing • Top-down Approach • Bottom-up Approach • Financial Ratios • Investment Thesis

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Tesla Motors

• Value Investing • Dividend Yield • Growth Investing • Top-down Approach • Bottom-up Approach • Financial Ratios • Investment Thesis

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Tesla Motors

• Value Investing • Dividend Yield • Growth Investing • Top-down Approach • Bottom-up Approach • Financial Ratios • Investment Thesis

• Manufactures and sells electric cars.

• Unique business strategy.

• Visionary leader Elon Musk – SpaceX, Paypal, Solarcity.

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• Websites • Books • Others

Websites

1. Bloomberg.com 2. Investopedia.com

3. Google.com/finance

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• 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

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• Websites • Books • Others

Others

• Bloomberg Terminal • NUS Investment Society’s Workshop

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• Websites • Books • Others

Others

• NUS Investment Society’s Workshop

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X` Introduction

Fundamental Analysis

Examples & Resources

Introduction to TA

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Introduction to TA