Introduction

It is very common to hear the word “fundamentals” when we talk about stocks investment. Analysts and fund managers always mention how good the fundamental of a company is while some of the traders make an opposite claim that the fundamental of a company is not necessary and they make their investing decisions by relying on the technical analysis. In short, different individuals have different views on “fundamentals”.

You might be wondering what is “fundamental”. Is “fundamental” an important aspect to be considered in our investment? In our pervious posts, we focus much on technical analysis of a stock. Kindly read Introduction of MQ Trader Trading Strategies for more information. In this topic, we will be discussing more on the fundamental analysis of a stock.

What is fundamental analysis?

Fundamental pays more attention to a company’s financial statements which provide much information on the historical, current and future performance of a company. These data allows investors to evaluate the health of a company.

In fact, the price of a stock may not reflect the actual value of the stock, as the stock may be overvalued or undervalued in the market. Fundamental analysis plays an important role in determining the intrinsic value of a company to measure the worthiness of a stock.

MQ Trader Fundamental Analysis

Source: MQ Trader Stock Analysis System

MQ Fundamental analysis is provided by MQ Trader based on various qualitative and quantitative factors such as company’s revenues, profit margins, return of equity, earnings per share, dividend yield, dividend per share, net asset per share and other metrics. These financial metrics will be further explained in the next blog – MQ Trader – Fundamental Indicators [TOPGLOVE] (Part 1)

All the financial metrics are able to answer the questions such as:

• Is the company’s revenue increasing?
• Is the company able to earn a profit?
• Is the company competitive enough to beat its competitors in the long run?
• Can the company settle its debt?
• Is the company’ stock good for investment?

Source: MQ Trader Stock Analysis System

MQ Trader Fundamental Rating

There is a key feature which is MQ Trader Fundamental Rating available in MQ Trader stock analysis system. This feature is very popular among the investors, as it reveals the overall performance of a company according to some fundamental tests set by MQ Trader. Fundamental analysis of a stock can be eased, as investors are able to evaluate the financial background of a company just in a glance before reviewing the details of the financial metrics.

Source: MQ Trader Stock Analysis System

According to MQ Trader fundamental criteria, a stock must achieve MQ Fundamental Rating > 2.5 before it is qualified to be suitable for long term investment. In order to reach this rating, a stock has to pass more than half of the fundamental tests set by MQ Trader. The requirements to pass these fundamental tests are carefully reviewed by MQ Trader to determine the performance of a company accurately and efficiently.

The figure above shows the MQ Fundamental Rating of TOPGLOV and it is generally a fundamentally good company, as it scores 4.1/5.0 which is a high MQ Fundamental Rating. Moreover, it passes 6 out of 8 fundamental tests as shown in its rating breakdown.

To know more about MQ Fundamental Tests, please proceed to MQ Trader – MQ Fundamental tests [TOPGLOV] Part 1.

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We would like to develop this system based on community feedback to cater for community needs. Thanks to all those who have provided valuable feedback to us. Keep those feedbacks coming in!

Disclaimer

This article does not represent a BUY or SELL recommendation on the stock covered. Traders and Investors are encouraged to do their own analysis on stocks instead of blindly following any Trading calls raised by various parties in the Internet. We may or may not hold position in the stock covered, or initiate new position in the stock within the next 7 days.

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MQ Trader stock analysis system uses Artificial Intelligence (AI), various technical indicators and quantitative data to generate accurate trading signals without the interference of human's emotions and bias against any particular stock. It comprises trading strategies which are very popular among fund managers for analysing stocks. 

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