At Simply Wall St we are firm believers in the value and effectiveness of “fundamental value analysis”. Some of you may have heard of Warren Buffet, he is one of the more famous individuals that invest in this style.
What is fundamental value analysis?
This process involves looking at a company’s financials over several years, such as their income, balance sheet and cash flows in order to analyse its stock. We also incorporate the consensus forecasts of analysts from investment banks, broking houses and investment research firms that cover each company.
How does Simply Wall St perform its analysis?
We take the company’s financials and analyst forecasts and use them to assess the company’s potential over the long-term. The Simply Wall St app performs a number of quantitative checks across a range of assessment criteria. The checks are based on widely accepted and tested investment criteria and used by demonstrably successful investors and investment firms.
Our checks are divided into 5 assessment criteria:
|
Analysis |
Assessment Criteria |
|
Valuation |
The fair value of the company's shares and how that value compares with the current share price, other companies and the stock market |
|
Future growth |
Anticipated future financial performance based on analyst forecasts |
|
Past performance |
The historical financial performance of the company |
|
Financial health |
The financial strength of the company's balance sheet |
|
Dividend |
The dividend being paid, and the sustainability of the dividend |
Tip: You can see the details of each check by hovering over the checklist to the right of each analysis section on the Simply Wall St app.
Snowflake analysis summary
The results of the checks in each of the 5 assessment criteria are presented visually in our Snowflake. The snowflake has been designed to present the results for a company as a visually intuitive summary.
If you would like more information about our Snowflake, see our article How does the Snowflake work?
Learn more about our Analysis Model
Our analysis model is completely open and transparent. For more information about our Company Analysis Model or for more detail about each of the 5 assessment criteria, read more on our Github page.