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Security Analysis

This document provides an overview of security analysis. It discusses the different types of securities like equity shares, bonds, and derivatives. It also describes the two main types of security analysis: fundamental analysis and technical analysis. Fundamental analysis examines factors like a company's earnings, management, and industry to estimate future stock performance. Technical analysis uses historical stock price movements and trends shown in charts to predict future prices. The document includes examples demonstrating how to use both fundamental and technical analysis to evaluate securities.

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Anusha Sunkara
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4K views

Security Analysis

This document provides an overview of security analysis. It discusses the different types of securities like equity shares, bonds, and derivatives. It also describes the two main types of security analysis: fundamental analysis and technical analysis. Fundamental analysis examines factors like a company's earnings, management, and industry to estimate future stock performance. Technical analysis uses historical stock price movements and trends shown in charts to predict future prices. The document includes examples demonstrating how to use both fundamental and technical analysis to evaluate securities.

Uploaded by

Anusha Sunkara
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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SECURITY ANALYSIS

Presented by: S.Anusha V. Jyothsna sowgandhi MIC College of Technology

CONTENT
Introduction to stock exchange Security meaning Types of securities Security analysis types
fundamental analysis Technical analysis

Conclusion

STOCK MARKET
Stock Exchange also called Stock Market or Share Market The price at which each buying and selling transaction takes is determined by the market forces. Stock markets started in 1881. Totally 21 stock exchanges in India. National stock exchange and Bombay stock exchanges are famous stock exchanges.

TYPES OF SECURITIES
Equity shares

Shares
Preference shares

Government securities

Securities market

Debt

Debentures

Bonds

Futures

Derivatives
Options

EQUITY SHARE CERTIFICATE

PREFERENCE SHARE CERTIFICATE

BOND

DEBENTURE

DERIVATIVES

SECURITY ANALYSIS
The analysis of various tradable financial instruments is called security analysis. It is the initial phase of the portfolio management process. This step consists of examining the risk-return characteristics of individual securities. Buy under priced securities and sell over priced securities.

TYPES OF SECURITY ANALYSIS

Security analysis

Fundamental analysis

Technical analysis

FUNDAMENTAL ANALYSIS
It is a logical and systematic approach to estimating the future dividends and share price.

It is based on the basic premise that share price is determined by a number of fundamental factors.
The fundamental factors are relating to EIC analysis framework

EIC analysis framework


Economy analysis

Fundamental analysis

Company analysis

Industry analysis

ECONOMY ANALYSIS
Factors including while making economy analysis
GDP Interest rates Inflation Exchange rates Government revenue , expenditure and deficits

INDUSTRY ANALYSIS
Industry life cycle

There are 24 sectors in Indian industry. They are


Banking sector Information technology sector Pharmaceutical sector Agriculture sector Real estate sector Telecommunication sector Textiles sector Media sector Auto mobile sector etc.

COMPANY ANALYSIS
Factors Competitive edge Earnings Capital structure Management Operating efficiency Share value

Historical price of stock


P/E ratio Economic condition Stock market condition

Future price

Present price

[Factors that affect present and future values]

TECHNICAL ANALYSIS
A technical analyst tries to identify the historical patterns from the chart, based on this he/she is going to forecast the future price movement. stages in technical analysis:
Collecting data Represent in charts Evaluation of historical patterns Forecasting the prices

TYPES OF CHARTS
Line chart

Bar charts

A candlestick chart

EXAMPLE ON FUNDAMENTAL ANALYSIS


Sno.
1 2 3. 4 5

Company P/E
Wipro Bharti Airtel Cipla ITC L&T 16.24 26.44 23.34 30.82 20.86

Fundamental analysis NPM EPS


14.9 3.9 20.5 23.9 7.5 23.65 10.01 15.83 8.22 74.37

6 7
8 9 10

NTPC ONGC
DR.REDDY S HDFC AXIS Bank

14.45 8.86
18.96 28.94 9.8

15.5 30.1
13.2 20 17.8

11.70 31.68
88.15 26.91 107.50

Profit volume ratio (P/E ratio):Market price /Earnings per share(EPS)

Earnings per share(EPS):Net Profit Available To Equity Shareholders/ Number Of Shareholders

EXAMPLE ON TECHNICAL ANALYSIS


Date 14-Aug-12 16-Aug-12 17-Aug-12 21-Aug-12 22-Aug-12 23-Aug-12 24-Aug-12 27-Aug-12 28-Aug-12 29-Aug-12 30-Aug-12 31-Aug-12 Open Price 356 354.2 349.4 350.65 355 355.65 362.95 366.5 360.5 364 364 369 High Price 357.55 354.7 354.5 358.5 357.45 366.75 366.5 366.85 365 369 370 372.5 Low Price 352.4 347 346.5 350.65 350.25 355.65 360.25 360.05 359 361.5 362.1 360.55 Close Price 355.5 349.4 353.5 355.75 354.5 363.1 365.1 361.25 363.65 364.15 369 362.6

3-Sep-12 4-Sep-12 5-Sep-12 6-Sep-12

362.9 363 361 362.5

372.5 366 364 379

361.65 360.4 357.7 360.7

364.2 363.05 362.1 377.45

7-Sep-12
8-Sep-12 10-Sep-12 11-Sep-12 12-Sep-12 13-Sep-12 14-Sep-12

381.5
378.5 380 373.5 377.25 387.1 395.95

384.8
382.6 382.3 377 386 389.35 395.95

376.9
378.5 375 372.1 375.3 385.5 387.55

377.8
380.75 376.45 374.85 384.55 387.9 391.55

CONCLUSION
Both analysis are very essential to analysis the securities. Fundamental analysis gives good results comparatively technical analysis. If investor wants to invest his amount on long term bases he got for fundamental analysis. Then investor may get good amount of return.

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