Fundamental Analysis is the process to find out “intrinsic value” of a stock based on real factors behind the company. These factors include the macro-economic situation, the quality of management, the business environment and the financial situation of the company.
Once the intrinsic value of the stock is determined, it can be used to determine if the stock is available at a fair price or the stock is costly. e.g. If the intrinsic value is more than the market price of the stock, that means that the stock is available at a discount.
On the other hand, if the market price is higher than the intrinsic value, that means that the stock is priced more than its fair value.
Fundamental Analysis is typically used by long term investors who are not looking for immediate returns or rather who do not mind holding the securities for a longer period of time.

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