Trade Like a Girl 💸

In the last few posts, we looked at the map of the price. But just because a chart looks pretty doesn’t mean the company is actually healthy. You wouldn’t buy a car just because it has a nice paint job, you’d want to check the engine first.

Fundamental Analysis is checking the engine of a company. You are looking at the math behind the business to see if it’s actually making money or just running on hype.

Let’s start with basic fundamental analysis. There are three key numbers you should check for any stock:

• Revenue (The Top Line): This is the total amount of money the company brought in. Is it growing every year? If a company’s revenue is shrinking, they are losing their edge.

• Net Income (The Profit): This is what’s left after they pay their employees, taxes, and rent. Some companies have huge revenue but zero profit. You want to see a company that actually knows how to keep the money it makes.

• The P/E Ratio (The Price Tag): This stands for Price-to-Earnings. It tells you if a stock is expensive or on sale compared to its peers. A super high P/E might mean the stock is overhyped, a lower P/E might mean it’s a bargain.

When you combine this with your charts, you become a dangerous trader. You find a healthy, profitable company (Fundamentals) and then wait for the perfect entry on the chart (Technicals) to enter.

The Homework: The Detective Work

Step 1: Pick a Ticker

Choose a brand you use every day (like $AAPL, $SBUX, or $NKE).

Step 2: Check the Math

Go to Google or Yahoo Finance and search for that stock. Look for the “P/E Ratio” and “Net Income.”

Step 3: The Growth Test

Look at their Revenue over the last 3 years. Is the line going up or down?

Step 4: Post Your Report

In the comments, tell us: “I looked at [$Ticker]. Their revenue is [Up/Down] and their P/E is [Number]. I think this company is [Strong/Weak].”