What is Stock Fundamental Data? Uses, Analysis & Data Sources

Stock Fundamental Data Explained

How is Stock Fundamental Data collected?

Prior to making a long-term investment decision, stock fundamental data analysis is recommended. Stock fundamental data varies according to the location of the stock market. However, data is collected through the financial statements of a company and from various global markets. Two of the largest stock exchanges from which stock fundamental data, including the asset portfolios of different companies, is collected, include the Nasdaq Stock Market and the New York Stock Exchange. These sources are then organized and validated to acquire accurate and error-free data.

These datasets can then be used to analyze and assess the stock market and the comparative financial health of a company. The Securities and Exchange Commission lays out the foundations for the stock exchanges. Both the Nasdaq Stock Market and the New York Stock Exchange are required to publicly report and share stock fundamental data. It is with stock fundamental data that you can compare markets to forecast a stock’s future value.

Main Attributes

There are lots of common attributes of stock fundamental data. Datasets can provide an insight into over 150 attributes of a stock and include the basic, or in other words, fundamental financial information about a company. Insights into company cash and equivalents, total company revenue, cash generated from operations and many more are provided across datasets. For investors it may also prove beneficial to consider the daily stock index – high, open, low, close, and volume. Analysis of these attributes is essential when deciding which data to purchase. Additionally, it is important to consider the historical value of the stock. Historical financial company information is essential for fundamental analysis strategy.

Use Cases

Stock Fundamental Data is used to understand the way a company works financially on a fundamental level. One of the main questions that the analysis of stock fundamental datasets addresses is – has the stock been correctly priced? A widespread concern amongst investors is the prospect of paying too much for company stocks. However, the methodology of fundamental dataset analysis provides an insight into the intrinsic value of a company and its stock. Investors and traders use stock fundamental data to analyze the growth of particular stocks or use it as part of their trading strategy by conducting fundamental analysis.

Stock fundamental data is used to compare markets from their historical value and predict their future value. Having this data makes it easier for traders to comprehend the different stock market trends – locally or globally. The goal amongst investors is to purchase stock when priced below its intrinsic value. By knowing the intrinsic value of a stock, one can determine whether it is the right time to invest and purchase company stock. By knowing if the stock is being undervalued or overvalued, one can determine if the share price of a stock is already too high or whether further growth can be expected, addressing whether a company is suitable for a long-term or short-term investment.

Stock Fundamental Data analysis

Stock Fundamental Data analysis considers the basic financial elements of a company such as its cash flow, asset returns and history of profit and uses analysis of this basic public company data to calculate the true value of its stock. Datasets can be used to determine the intrinsic value of a stock, informing whether the stock of a company is being undervalued or overvalued. A stock’s intrinsic value can be calculated using either a bottom-up or top-down approach to fundamental analysis. Investors using the bottom-up approach consider the distinct aspects of an individual company, building a dataset based on the advantages specific to a particular company.

Alternatively, investors approaching fundamental data analysis on a top-down basis to determine whether company stock is priced at its real value or not, consider the macroeconomic factors and how this impacts the stock of an individual company. Analyzing the surrounding economic climate and the current state of the sector is followed by the micro-scale analysis of the financial elements specific to the company to determine if the stock is priced at its real value or not. For any informed investors on the stock exchange market, fundamental analysis is considered a critical tool that helps these investors win big on the stock exchange market when making the decisions to either buy or sell stocks.

Through stock fundamental data analysis, investors on the stock exchange market are given the opportunity to look at any data which is considered to have impact as far as the price or estimated value of a listed stock is concerned. Stock fundamental data analysis involves deeply digging into financial statements to estimate the intrinsic stock price. Stock fundamental data analysis simply means getting to the basics of a company’s performance through the creation of a company profile. This profile points to the fundamental value of a company’s shares, the surrounding political circumstances while also analyzing company performance within its sector and considering company competition. By displaying an insight into the value of the company, public stock fundamental data analysis sets can be used by investors to inform their decisions to either buy or sell stocks.

What’s the difference between fundamental and technical analysis of a stock?

When it comes to analyzing stock, fundamental and technical stock analysis are often used in combination. However, there are a number of differences between fundamental and technical stock analysis. Fundamental stock analysis focuses on the long-term financial health of a company, calculating the given stock’s intrinsic value. Fundamental analysis considers the value of a stock according to company bank statements, a company’s history of profits, stock prices, growth rates and revenues. The price of stock varies and fluctuates however, fundamental stock analysis considers the intrinsic value of a stock and its value is usually quite stable.

When it comes to the fundamental financial data of a strong company, short-term mishaps or fluctuations across the external domestic economic sphere won’t have a negative long-term impact on the value of the company. However, rather than considering the intrinsic value of stock, technical analysts consider the more-short term patterns of a stock. Technical analysts chart any patterns, taking into consideration the previous reception of a company’s stock and look at previous stock trends.

Contrastingly, technical analysis doesn’t consider the fundamentals of a company. Instead, technical analysis solely analyzes the trading and the price historical trend of a given stock by determining trading signals and other analysis tools that aid in the evaluation and analysis of the strengths, weaknesses, opportunities, and threats (SWOT) of a company’s stock listed on the securities exchange market. Technical analysis is a more advanced form of stock analysis that takes into account a stock’s past performance, using charts and tools such as momentum oscillators to establish patterns which can be used to help make informed predictions about the projected future performance.

Technical analysis helps investors establish financial knowledge through proper identification of patterns and trends that are repetitive in nature and have a direct bearing on the prices of stocks and is based on the premise that previous fluctuations in stock prices aren’t arbitrary, but can instead be used to find patterns which will help inform predictions about future stock values. Fundamental and technical analysis of stock are usually carried out in conjunction with one another and generally, stock fundamental analysis forms the basis upon which technical analysis is built. Investors can increase their knowledge about these analyses through purchasing the data from commercial providers by means of stock fundamental data subscription service to aid their technical analysis.

What are the top tools for fundamental analysis?

Tools for Fundamental Analysis are used to generate statistical information surrounding the intrinsic value of stocks. Investors and analysts use fundamental analysis tools, calculating earnings per share (EPS), Price-to-earnings ratio (P/E), return on equity, price-to-book ratio (P/B), price-to-sales ratio, dividend payout ratio and projected earnings growth to inform predictions of the future value of a company and its stock price. These ratios are used to signify the financial health of a company.

Earnings per share (EPS).
Earnings per share is a tool within fundamental stock analysis used to inform investors about how much income a company generates per share. Earning per share is calculated by dividing the outstanding shares of a company, by the total financial income generated by the company. The company in question is profitable if the earnings per share is a positive rather than a negative number.

Price-to-earnings ratio (P/E)
Price-to-earnings ratio calculation is a tool used across fundamental analysis to determine whether in relation to similar companies across the sector, a company is being comparatively undervalued or overvalued. The price-to-earnings ratio is determined by taking the market capitalization of a company and dividing it by its total earnings and is useful when assessing its comparative stock prices, providing an insight into understanding the comparable position of the company and whether it is a company suitable for investment.

Return on equity
Return on equity is a tool used to assess the effectiveness of company management, informs investors about the relative income of a company when compared to stockholder equity and is determined by dividing the income generated by a company by the total equity of shareholders.

Price-to-sales ratio
Price-to-sales ratio determines by how much the market capitalization of a company exceeds company sales. The ratio is calculated by dividing the market capitalization of a company’s shares by total company sales and highlights how much investors pay for one-dollar worth of stock. If the price to sales ratio is below one, then the company is being undervalued, market capitalization helping to provide an insight into whether it is suitable to invest in a company or not.

Dividend payout ratio
Dividend payout ratio refers to the tool used to determine the percentage of earnings that company shareholders are paid and is calculated by dividing dividend amount for each share by the amount of revenue for each share.

Projected earnings growth
The projected earnings growth tool is used to determine the growth of a company over a particular period of time. Once the earnings per share of a company has been calculated, the growth rate across a period of time can be calculated by can be determined by subtracting the initial company earnings per share by the final earnings per share and dividing the number by the difference.

Since investors need the correct financial knowledge as far as the application of these tools is concerned, commercial data providers give vital insights when analyzing stocks to determine their fundamental price. If investors project a higher future value than the current market price, then investors are more likely to purchase the stock of a company.

Quality Assessment

There are several ways one can assess the quality of Stock Fundamental Data. High-quality stock fundamental data is incorporated within global markets and exchanges such as the Nasdaq Stock Market (NASDAQ), the New York Stock Exchange (NYSE) and the Security of Exchange commission. Equally, datasets should provide basic data including company bank statements, a company’s history of profits, stock prices, growth rates and revenues, while also providing more complex data analytics.

Likewise, stock fundamental data should have historical stock prices reaching back over at least the previous six years and you should also check how data providers organize their data and how the data is delivered. Stock fundamental data delivery should be free from errors and must be carried out in a timely manner. It may also be useful to ask for a company’s customer support. Is the company responsive? Do they provide a free trial or data sample? All these questions and assessment methods allow investors to determine the quality of the stock fundamental data and assess the right dataset purchase option.

Where can I buy Stock Fundamental Data?

Data providers and vendors listed on Datarade sell Stock Fundamental Data products and samples. Popular Stock Fundamental Data products and datasets available on our platform are InfoTrie Stock Price Market Data - Stock fundamentals, historical coverage globally by InfoTrie, US Equities Packages - Stock Prices & Fundamentals by Intrinio, and Fundamental data for international equities by Twelve Data by Twelve Data.

How can I get Stock Fundamental Data?

You can get Stock Fundamental Data via a range of delivery methods - the right one for you depends on your use case. For example, historical Stock Fundamental Data is usually available to download in bulk and delivered using an S3 bucket. On the other hand, if your use case is time-critical, you can buy real-time Stock Fundamental Data APIs, feeds and streams to download the most up-to-date intelligence.

What are similar data types to Stock Fundamental Data?

Stock Fundamental Data is similar to Proprietary Market Data, Indices Data, Intraday Stock Data, Stock Price Data, and Implied Volatility Data. These data categories are commonly used for Portfolio Analysis and Financial Intelligence.

What are the most common use cases for Stock Fundamental Data?

The top use cases for Stock Fundamental Data are Portfolio Analysis and Financial Intelligence.