Hi all, how do you apply fundamental analysis when picking stocks to invest in
For example
Salesforce has strong and growing free cash flow and a P/E ratio of around 20 which suggests it is a good buy But its PEG ratio is above 1.5 which indicates it is not undervalued
On the other hand ,
Oracle has a higher P/E and weaker free cash flow yet it is often rated a strong buy
And for SMCI, pe is low but net margin are shrinking with rise in revenue so no good sign of growth stock to buy .
I have taken time to study the income statement balance sheet and cash flow statement to understand all the finance terminology of business, but I still struggle to decide which company is actually a good investment
At moment, i think Salesforce is good due to strong fundamentals, and don't think AI will be able to take their market share much.
So what specific things should I look for to say this stock is a good buy And how do you actually use that information in your decision making