Stock Investing 101: Fundamental Analysis

​Prepare for the road ahead. Investing in the stocks I recommend really can change your life.

    If you don't find a way to make money while you sleep, you will work until you die.

 - Warren Buffett

Attract what you expect. Reflect on what you desire. Become what you respect and mirror what you admire. 

​​Why Do We Do Fundamental Analysis?

Because, as investors we need to know.

• What do I get as an owner of this business?
• Do they pay out dividends?
• Do they have great products and services?
• Do they have a lot of assets which they can use in their business?
• Will sales and profits grow in the future?
• Has management shown capability that they can deliver?
• How does it compare to my other investment options?

And looking for this answers to these questions is Fundamental Analysis.

Is the Company giving out Dividends?

• Who are the dividend-payers?

For complete list of company, visit edge.pse.com.ph or www.pse.com.ph

• Is it worth it? Know the interest rate.

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1. You must have it a day before ex-date.
2. Tax on Dividend = 10%

How to calculate dividend yield:

Just take the dividend amount multiply by 90% (less 10%  for tax) , divide it by the stock's price, and then multiply by 100 to convert to a percentage.

Net Dividend Yield = Dividends x 90% / Stock Price x 100

An example, HOLCIM PHILIPPINES, INC. (HLCM) declare a cash dividend Php 0.98 per share, and then the closing stock price per share is Php 14.78. Using the stated formula, Holcim dividend yield as:

5.96% = 0.98 x 90% / 14.78 x 100 

Where else can you get at least 5.96% net interest for your money?

Do they have a great Products and Services?

• How do I know if they do?

Do you need to pass through it everyday? (NLEX, SLEX, etc.)

• How do I know if they do?

Do you always find yourself craving for that chicken and mojos? (Foods)
Do you think they really "got it all for you"? (Malls)
Do you feel "you are in good hands"? (Banks)
Do you think owning a school is a good idea? (Schools)

Do they have a lot of assets they can use in their business?

A lot of earning assets.
A lot of cash to use when needed.

Will Sales and Profits grow in the future?​

New Projects/New Frontiers

Has Management shown capability that they can deliver?​

Know your Management (Attend annual stockholder's meeting).

How does it compare to my other investment options?

You can check the update and records of specific listed company with your broker platform. ​

     and from there, you make your Investment Decision.

In Summary, we do Fundamental Analysis to know:

• If we can expect to receive dividends.
• If the company has great products and services.
• If it has a lot of assets to use when needed.
• If sales and profits can be expected to grow in the future.
• If Management can deliver.
• If your potential investee company is better compared to other options.​​