Impacts of Fundamental Indicators on Investment Decisions

Abstract

This paper conducts a comparative analysis of the risk profiles, profitability, market ratios, of three companies-Apple, Tencent, and Xiaomi-based on their relevant stock fundamental indicators and provides investment recommendations for different types of investors regarding the stocks of these three companies. The performance of the stock fundamental indicators of these three companies exerts a significant impact on the investment decisions of different types of investors, directly determining their investment choices. This paper collects data on risk indicators such as the total market capitalization, beta coefficient, asset-liability ratio, and current ratio of the three companies; it also analyzes the profitability of the three companies from indicators including total asset turnover, profit margin, return on assets, and return on equity. In addition, it compares the market ratios of the three companies from indicators such as price-earnings ratio, price-to-book ratio, and dividend yield. Through the analysis of the stock fundamental indicators of the three companies, combined with the risk and target selection preferences of different types of investors, it is concluded that value investors and institutional investors would choose Apple for investment. Xiaomi is suitable for growth-oriented and theme-oriented investors. Tencent, with a relatively low price-to-book ratio and a high dividend yield, is suitable for dividend investors and longterm investors.