Fundamental analysis is a method of evaluating the intrinsic value of a security, such as a stock or bond, by examining related economic and financial factors. It involves analyzing a companys management, business model, financial ratios, financial statements, and other metrics. The purpose of conducting fundamental analysis is to determine whether a security is undervalued or overvalued and make an informed decision to buy, hold, or sell it in order to maximize the potential for gains.

Some key takeaways of fundamental analysis include:

• Fundamental analysis is a method of determining a securitys real or "fair market" value.
• Fundamental analysts search for securities currently trading at prices higher or lower than their real value.
• If the fair market value is higher than the market price, the security is deemed undervalued, and a buy recommendation is given.
• Fundamental analysis is used most often for stocks, but it is useful for evaluating any security, from a bond to a derivative.
• There are two types of fundamental analysis: qualitative and quantitative.
• Qualitative analysis looks at harder to measure factors such as the quality of a company’s management or the strength of its brand.
• Quantitative analysis analyzes an investment according to easily measured factors, such as the earnings or assets of the company that issued a stock.
• Fundamental analysis is one of two major methods of market analysis, with the other being technical analysis.

In summary, fundamental analysis is a valuation tool used by investors to determine the intrinsic value of a security by examining related economic and financial factors. It is used to identify investment opportunities and benefit from them by determining whether a security is undervalued or overvalued.