Analysts typically use three major approaches to assess securities: What Is Security Analysis? - Hedge Fund Alpha

In finance, is the disciplined process of evaluating tradeable financial instruments—such as stocks, bonds, and derivatives—to determine their investment potential and risk.

The primary goal of this analysis is to identify the of a security, which represents its true worth independent of its current market price. By comparing this value to the market price, investors can decide whether to buy (undervalued), sell (overvalued), or hold (fairly valued) an asset. Core Methodologies