F

Glossary · PSX term

Fundamental analysis.

Fundamental analysis values a stock by studying the business, its financials, and its industry.

Definition

It looks at earnings, balance sheets, management, and economic conditions to estimate what a company is really worth. It contrasts with technical analysis, which focuses on price and volume patterns.

Worked example

Reading a company's accounts and judging its earnings outlook to decide if it is cheap is fundamental analysis.

Related on PSX Clarity

Technical analysis

Intrinsic value

Price-to-earnings ratio

Discounted cash flow (DCF)

More glossary terms

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Free float is the portion of a listed company's shares that are available for public trading on the open market.

Free cash flow is cash left after operating needs and capital spending. It helps investors judge whether profits are converting into cash that can reduce debt or fund dividends.

Free-float market capitalisation

Free-float market cap values only the shares available for public trading, not locked or strategic holdings.

A final dividend is the payout declared with full-year results and approved by shareholders at the AGM.

Face value, or par value, is the nominal value of a share set in the company's accounts.

Futures contract

A futures contract is an agreement to buy or sell a security at a set price on a future date.

Filer vs non-filer

In Pakistan, a filer files income tax returns and pays lower withholding rates than a non-filer.

Forward P/E divides the share price by expected future earnings per share rather than past earnings.

Fear of missing out (FOMO)

FOMO is the urge to buy a rising stock just because others are profiting from it.