MÁSTER EN BOLSA Y MERCADOS FINANCIEROS

Share Prices
Fundamental Analysis
I. Fundamental Analysis
• The belief that a share has a true or correct value (intrinsic value),
which might be different from its stock market value. Markets are not
efficient.
• Fundamental Analysts study:
I. Qualitative Measurements
II. Quantitative Measurements
III. Economic Indicators
IV. Macroeconomics
V. Microeconomics

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I. Qualitative Measurements
• Qualitative Measurements – measuring the quality of something-
uncountable and intangible elements and values.
• Intangible – unable to be touched, not having a physical presence.

• Examples:

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II. Quantitative Measurements
• Quantitative Measurements – tangible and measurable values and
elements.
• Tangible – perceptible by touch – clear and definite: real.

• Examples:

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III. Economic Indicators
• Economic Indicators – Statistics about economic activity such as
business cycles (expansion and contraction) – Usually on a
macroeconomic scale.

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Economic Indicators
• Business Cycle (economic or trade cycle) – The downward and upward
movement of Gross Domestic Product around its long-term growth trend.
• Gross Domestic Product (GDP)– Total value of goods and services produced and
provided by a country during a period of one year.
• Consumer Price Index (CPI) – An average of prices for a select group of consumer
goods and services (basket of goods) – associated with the cost of living.
Furniture Healthcare
Gas Insurance
Food Rent
Clothing Mortgages
• Unemployment Figures
• Oil
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IV. Macroeconomics
Conditions of the economy, market and industries ‘as a whole’.
• Inflation – The increase of the average price of a basket of select goods –
relates to purchasing power.
• Economic Growth:
• ‘Economic Booms’ – Periods of expansion
• Recession – A general economic decline lasting at least two quarters (6 months)
• Depression – A major economic decline lasting three or more years with a decline of the
GDP by at least 10%.
• Income
• GDP
• Unemployment

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V. Microeconomics
• Economic conditions of a particular company or individual.
• Revenue – All the money a company brings in during a period of time.
• Earnings – Revenue minus expenses (usually NOT including taxes or interest)
• Return on Equity – Profits relating to shareholder equity
• Return – How much an investor/owner receives.
• Profit Margins – similar to earnings but expressed as a ratio – percentages.
• How much ‘out of’ every dollar is considered earnings.
• Can be used to measure success as a whole or for individual goods sold.
• Example: Production cost of a small ice cream cone = $.50, Cost of a small ice cream cone = $1.00 – The profit
margin is $.50 or %50.
• Future Growth – Increase in revenue, dividends, earnings
• Risk – Mitigating different types of risk by identifying, assessing (examples: risk
assessment, SWOT analysis) managing (example diversification) and monitoring outcome.

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