The Fundamental Analysis section evaluates stocks based on their financial statements, valuation metrics, and macroeconomic context. It is organized into four tiers: screening, optimization, risk analysis, and deep-dive research.
Tier 1: Multi-Factor Screening
The Multi-Factor Screener (FM099MFSX) is the entry point. Select a global stock index (S&P 500, NASDAQ 100, FTSE 100, DAX 40, CAC 40, Euro STOXX 50, Nikkei 225, or Hang Seng) and the screener ranks every stock across four factor categories:
- Value — P/E, P/B, EV/EBITDA, dividend yield. Identifies stocks trading below their intrinsic worth
- Quality — ROE, profit margins, debt ratios, Piotroski F-Score. Identifies financially strong companies
- Momentum — Price momentum, earnings revisions, relative strength. Identifies stocks with positive trajectory
- Growth — Revenue growth, earnings growth, free cash flow growth. Identifies companies expanding rapidly
Each stock receives a composite score. You can adjust factor weights using the sliders to emphasize what matters most to your investment thesis. The results table is sortable and exportable.
Adjusting factor weights lets you express different investment styles. Setting Quality and Value high produces a "Warren Buffett" style screen. Setting Momentum and Growth high produces a growth-oriented screen. The default equal weighting provides a balanced view.
Tier 2: Portfolio Optimization
Once you have identified candidate stocks, three optimization modules help you determine how much capital to allocate to each:
Mean-Variance Optimization (MVO)
The classic Markowitz approach. Enter your selected tickers and the module computes the efficient frontier — the set of portfolios that maximize expected return for each level of risk. You can select the minimum variance portfolio, the maximum Sharpe portfolio, or any point along the frontier.
Hierarchical Risk Parity (HRP)
A modern alternative to MVO that uses correlation clustering. It groups similar assets together using a dendrogram (tree structure) and allocates capital so that each cluster contributes equal risk. More robust than MVO when asset correlations are unstable.
Inverse Volatility (IVO)
The simplest approach: weight each asset inversely proportional to its historical volatility. Less volatile assets get more capital. No covariance estimation required, which makes it stable and intuitive.
All three modules produce a weight allocation table showing exactly how much of your capital goes to each ticker. You can save the resulting portfolio and track it in the Portfolio Visualizer.
Tier 3: Risk Evaluation
Two modules for quantifying portfolio risk:
Monte Carlo Simulation
Runs thousands of simulated price paths based on historical return distributions. Enter a ticker and the module generates a probability distribution of future portfolio values, showing best-case, worst-case, and median outcomes over your chosen time horizon. Useful for understanding the range of possible outcomes.
Value at Risk (VaR)
Calculates the maximum expected loss over a given time period at various confidence levels (95%, 99%). Uses both parametric (assumes normal distribution) and historical (uses actual return distribution) methods. Helps you understand how much you could lose in a bad scenario.
Tier 4: Deep-Dive Research Units
Eight specialized modules for detailed single-stock analysis. Enter a ticker and each module produces a comprehensive research report:
- Profitability Quality Analyzer — Margin trends, ROE decomposition, operational efficiency over multiple years
- Cash Flow Quality Analyzer — Operating cash flow consistency, free cash flow yield, cash conversion ratios
- Earnings Quality Analyzer — Earnings stability, accrual ratios, asset turnover trends
- Capital Allocation Analyzer — Debt management, coverage ratios, capital expenditure efficiency
- Piotroski F-Score — The classic 9-point fundamental scoring system for financial health
- Valuation Multiples — Historical and comparative P/E, P/B, EV/EBITDA analysis with sector benchmarks
- Intrinsic Value Calculator — DCF (Discounted Cash Flow) modeling to estimate fair value per share
- Macro Economic Overlay — Interest rates, inflation, GDP growth, and how they relate to the stock
Fundamental data comes from the Financial Modeling Prep (FMP) API. All modules use real financial statements. Data availability varies by index — US stocks generally have the most complete coverage.
Recommended Workflow
- Screen first — Run the Multi-Factor Screener on your target index. Sort by composite score and note the top 10-15 stocks
- Deep dive — Open 2-3 Research Units on your top candidates. Look for consistent profitability, healthy cash flows, and reasonable valuations
- Check risk — Run Monte Carlo simulation on your shortlist to understand downside potential
- Optimize allocation — Feed your final selections into MVO, HRP, or IVO to determine position sizes
- Track it — Save the portfolio and monitor it in the Portfolio Visualizer. Add it to a My Projects project for ongoing research tracking