Fundamental Analysis Project
Introduction

Fundamental Price Modeling
 CSE 691 Project

Short Description

A person not familiar with the basic facts of economics and finance could assume that the price of a company's stock reflects, by a large amount, the actual value of the company. However, this notion cannot hold true in a free market where supply and demand are, eventually, the factors that affect market prices. But is the financial data of a company irrelevant to its stock price and useless for an investor? Presumably it is not, as there are people who use Fundamental Analysis to determine investment opportunities, and Fundamental Analysis is a method that utilizes the economic fundamentals of a company.

For this project we will try to use a company's financial data to attempt to calculate the market capitalization. Any significant discrepancies between the stock price and the fundamental price are of interest and are further explored.

Project Website Contents

The project website is devided in the following sections:

Short project description, project website contents, available data.
Introduction to the financial statements useful for this project : Income Statements, Balance Sheets, Cach Flow Statements.
Analysis on the Book Value and the Internal Value of the companies. Comparison to actual stock value by sector.
Adding Dividends and Revenue to the Book / Internal Value analysis.
Investing outcome after using the projects analysis results.

 

Available data

  The Financial Lab mysql database was used to gather the following data:

  •   Narrowed down to 1368 stocks for which full data set was available. A list of the 1368 symbols can be downloaded from here.
  •   Balance Sheets for 2001, 2002, 2003, downloadable in text.
  •   Income Statements for 2001-2003, downloadable in text.
  •   Cash Flow for 2001-2003, downloadable in text.
  •   Interest rates for 2001-2003.
  •   Actual stock prices (text) and Market Caps (text) for the period (for comparison)
  •   Also, the industry sector info for the 1368 companies was downloaded from finance.yahoo.com. A small perl parser was used, available here.

 

Report

  Available in pdf here.