Top 3 Online Tools for Fundamental Analysis

Aug 14, 2020 03:47 AM ET
Top 3 Online Tools for Fundamental Analysis

Fundamental Analysis is what you need!

Investing is about two things: market analysis and good judgement. Good judgement depends on the situation one is facing, but market analysis has no two ways. In market analysis, you are either an ardent technician or trust fundamental and technical analysis in equal measure.

Undoubtedly, technical analysis is more common because it focuses on the short-term behavior of price action. But fundamental analysis is crucial because it helps investors to determine the intrinsic value of a tradable instrument. This information is particularly useful for long traders.

Fundamental analysis evaluates certain specific indicators, after which one can create forecasts about the future price of the instruments. Technical tell you what to do today if you want short-term returns. However, fundamentals help you anticipate the instrument's long-term performance, whether the current trend is sustainable and for how long. In short, fundamental analysis is how investors choose their winners.

What fundamentals do you need from these tools?

Sadly, fundamental analysis is often overlooked by investors because it is less popular. For that matter, let us restate that fundamental analysis is critical when evaluating a stock's intrinsic value. This information ensures that you avoid knee-jerk decisions when creating your trading strategy. The following tools are used in the fundamental analysis:

  • Earnings Per Share

Earnings per share (EPS) is an important ratio that tells investors how profitable a business is. The ratio is derived from the quotient of a company's profit and its common stock outstanding. 

As a fundamental analysis tool, EPS derives its power from the ability to point investors in the right place concerning the company's likely financial position in the future. If a company is profitable today, it is more likely that its future financial position will be strong. Also, this means its stock will continue growing into the future.

  • Price-to-earnings (P/E) ratio

The P/E ratio reflects the payouts of a company relative to its stock price. With this information, you can be certain that owning a share of the company’s stock will give you earnings commensurate with the price you pay.   

  • Beta

Beta reflects the price of a company’s stock as it correlates with the industry. Usually, Beta is calculated by considering the price difference between the stock and the benchmark index. 

Top 3 Tools for Fundamental Traders

Finviz

FinvizFinviz is free for basic users, and even then, it is a powerful tool for scanning fundamental ratios. The tool is one of the best in the business in terms of screening charts and stock quotes. Users can access both fundamental and technical charts. 

One of the things that Finviz is particularly useful when scanning for earning reports of specific stocks. There are plenty of options in refining a search such that you only get the results you are looking for. Say you want stocks with upcoming earnings reports. You can easily customize the tool to do precisely that.

Finviz

Moreover, Finviz has a feature where you can customize charts in which you compare a stock's performance with the industry's benchmark index. Users can also find plenty of information about a particular market from the tool. It arranges information in terms of heat maps to make your research easier.

MarketWatch

MarketWatchMarketWatch is a lot of things. On the one hand, it is a resourceful platform for company information. Regular tools for fundamental analysis provide stock screeners and a few other features such as delayed quotes. On the other hand, MarketWatch offers comprehensive news and the ability for users to watch select tickers.

On MarketWatch, users can view the latest news in the financial markets and commentary on the latest stories that touch on the global economy. Furthermore, MarketWatch enables users to access company financials in one place.  

Elite members of the platform can access premium insights on Barron’s. Barron’s has a vast catalogue of top-notch in-depth analysis one can ever find. Experts make nonpareil market predictions that increase the smartness of the investment decisions that readers make.

Simply Wall Street

Simply Wall StreetSimply Wall Street is in its league when it comes to helping users to conduct fundamental analysis. In the first place, Simply Wall St is like a one-stop-shop for company financials but with a unique gist. Instead of reading raw balance sheets and cash flows that could be confusing, Simply Wall St breaks the data down into easily palatable infographics. 

Simply Wall Street

The standout features of this platform are the executive summary and a stock analysis report. In the executive summary, Simply Wall St's analysts give their verdict on a company based on two metrics; is the associated risk too high, and does the stock have rewards worth the price you pay?

Simply Wall St approaches stock analysis uniquely and ingeniously. It breaks down the analysis in nine different sections where each section addresses an aspect of the stock. For example, one section discusses the share price and the latest news. Here, readers learn everything there is about the share, historical performance, and the current position.

Simply Wall Street

Another unique offering is the snowflake analysis. This feature breaks down a company’s information and presents it based on Value, Dividend, Past, Health, and Future. The analysis helps readers to know all the vital information about a stock with one look. Furthermore, users can construct a portfolio to mirror the real portfolio of their investments. Therefore, investors can watch the target stocks as they behave based on Simply Wall Street’s algorithm to get an idea of what to do next. 


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