Fundamental Analysis
When to use
Activate when a user wants a fundamental read on a DSE stock: "is GP fundamentally
strong?", "what's the fair value of BEXIMCO?", "run a DCF", "any balance-sheet red
flags?", "is this overvalued?". This is the fundamental leg of the dual-mode signal —
feed its score into signal-synthesizer, or pair it with value-investment-checklist.
What it does
Runs three logical stages in one pass (PRD-002 REQ-104/105/018):
- Balance Sheet Reader (
balance_sheet_reader) — extracts key line items and
emits RED FLAGS: D/E > 1.0 (high leverage), free cash flow <= 0, declining earnings
(latest EPS < prior), current ratio < 1, interest coverage < 2, profit margin < 0.
- Valuation Extractor (
valuation_extractor) — three methods with explicit
assumptions and a fair-value range (low / median / high):
- DCF (Graham growth formula) —
eps_ttm * (8.5 + 2 * g * 100) where
g = min(earnings_growth, 15%).
- Graham number —
sqrt(22.5 * eps_ttm * book_value_per_share).
- PE-based —
eps_ttm * sector_median_pe (default 15 if unknown).
- Fundamental Synthesizer (
analyze) — combines earnings trend (EPS slope),
red-flag count, valuation gap (fair_median - price) / price, and disclosure
quality into a score in [-1, +1]. Confidence drops with red flags, aggressive
assumptions, or thin disclosure. Rating: strong_buy / buy / hold / sell.
Output is a Thinking Card (see suite README).
How to run
python3 scripts/analyze.py --input data.json --pretty
cat data.json | python3 scripts/analyze.py
Reads fundamentals (required). Price is taken from fundamentals.price, falling back
to the last ohlcv close. Returns score (-1..+1), confidence (0..1), rating,
key_metrics (fair_value_low/median/high, valuation_gap_pct, red_flags, pe, roe, de,
methods, assumptions) and reasoning.
Try it now with the shared fixture:
python3 scripts/analyze.py --input ../_fixtures/sample_input.json --pretty
Interpreting output
- A large positive
valuation_gap_pct means price sits below the fair-value median
(potentially undervalued); a negative gap means the opposite.
rating blends the valuation gap with the red-flag count — sell triggers on a
negative gap or three-plus red flags regardless of cheapness.flags carry confidence penalties (limited_disclosure, no_eps_history,
no_price_or_fair_value) — never silently dropped.
Notes
Valuation methods, the Graham formulas, default assumptions (r = 15%, terminal
g = 3%, sector P/E = 15), and DSE caveats are documented in
references/VALUATION.md — including why DSE P/E benchmarks
run higher than US comparables (PRD-001 REQ-044). Output is educational analysis only,
never financial advice.
1---2name: fundamental-analysis-23description: Reads a DSE stock's fundamentals, flags balance-sheet risks, derives a multi-method fair-value range, and returns a fundamental score, rating, and reasoning. Use when the user asks for fundamental analysis, intrinsic/fair value, DCF or Graham valuation, balance-sheet health, red flags, "is this stock cheap/overvalued", P/E, ROE, or whether a Dhaka Stock Exchange ticker is a good long-term buy.4license: Apache-2.05---6# Fundamental Analysis78## When to use910Activate when a user wants a fundamental read on a DSE stock: "is GP fundamentally11strong?", "what's the fair value of BEXIMCO?", "run a DCF", "any balance-sheet red12flags?", "is this overvalued?". This is the fundamental leg of the dual-mode signal —13feed its score into `signal-synthesizer`, or pair it with `value-investment-checklist`.1415## What it does1617Runs three logical stages in one pass (PRD-002 REQ-104/105/018):18191. **Balance Sheet Reader** (`balance_sheet_reader`) — extracts key line items and20 emits RED FLAGS: D/E > 1.0 (high leverage), free cash flow <= 0, declining earnings21 (latest EPS < prior), current ratio < 1, interest coverage < 2, profit margin < 0.222. **Valuation Extractor** (`valuation_extractor`) — three methods with explicit23 assumptions and a fair-value **range** (low / median / high):24 - **DCF (Graham growth formula)** — `eps_ttm * (8.5 + 2 * g * 100)` where25 `g = min(earnings_growth, 15%)`.26 - **Graham number** — `sqrt(22.5 * eps_ttm * book_value_per_share)`.27 - **PE-based** — `eps_ttm * sector_median_pe` (default 15 if unknown).283. **Fundamental Synthesizer** (`analyze`) — combines earnings trend (EPS slope),29 red-flag count, valuation gap `(fair_median - price) / price`, and disclosure30 quality into a score in [-1, +1]. Confidence drops with red flags, aggressive31 assumptions, or thin disclosure. Rating: `strong_buy` / `buy` / `hold` / `sell`.3233Output is a Thinking Card (see suite README).3435## How to run3637```bash38python3 scripts/analyze.py --input data.json --pretty39cat data.json | python3 scripts/analyze.py40```4142Reads `fundamentals` (required). Price is taken from `fundamentals.price`, falling back43to the last `ohlcv` close. Returns `score` (-1..+1), `confidence` (0..1), `rating`,44`key_metrics` (fair_value_low/median/high, valuation_gap_pct, red_flags, pe, roe, de,45methods, assumptions) and `reasoning`.4647Try it now with the shared fixture:4849```bash50python3 scripts/analyze.py --input ../_fixtures/sample_input.json --pretty51```5253## Interpreting output5455- A large positive `valuation_gap_pct` means price sits below the fair-value median56 (potentially undervalued); a negative gap means the opposite.57- `rating` blends the valuation gap with the red-flag count — `sell` triggers on a58 negative gap or three-plus red flags regardless of cheapness.59- `flags` carry confidence penalties (`limited_disclosure`, `no_eps_history`,60 `no_price_or_fair_value`) — never silently dropped.6162## Notes6364Valuation methods, the Graham formulas, default assumptions (r = 15%, terminal65g = 3%, sector P/E = 15), and DSE caveats are documented in66[references/VALUATION.md](references/VALUATION.md) — including why DSE P/E benchmarks67run higher than US comparables (PRD-001 REQ-044). Output is educational analysis only,68never financial advice.
kuntal-r-d