Fundamental Analysis is a way of calculating a stock's true value. Although some assumptions do go into deciding what the real value is. It usually involves an economic, industry and company analysis
If an Analyst believes a stock is undervalued, they would suggest that the stocks be bought, as it is likely that the value will eventually go up. That is to say, they would give it a buy rating.
Data that is available to the public is used to determine the real or intrinsic value of stocks. Warren Buffet or the ‘Oracle of Omaha,’ has been extremely successful with fundamental analysis. Keep in mind, just because fundamental analysts give a buy rating, it does not mean the share price will for sure increase in value.
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