To The Moon

Speaker: Jonathan Lo, Investment Representative at Tiger Brokers Singapore, on how fundamental analysis helps investors tell a stock's price from its value, and how to read a balance sheet in two quick checks.

[About the Speaker] Jonathan Lo is an Investment Representative at Tiger Brokers (Singapore). With nearly 20 years of practical trading and investment experience, he interprets markets through multi-asset, macro-directed long-short strategies expressed through equities and options.

[The Hook] Stock A trades at $20. Stock B trades at $25. Which one do you buy? Most people go for the cheaper one. Then the speaker added the details: A is a company in trouble that needs to raise funds and is issuing new shares to pay off debt. B is pricier, but pays a regular $5 dividend. Suddenly the answer isn't so obvious. "Price is what you pay, value is what you get," Buffett's line, was the thread of the whole session.

[Why Fundamental Analysis?]

This session is the third in Tiger's seminar series, after Foundations of Trading and Technical Analysis. The goal of fundamental analysis is to help you separate price from value. A friend telling you a $100 stock is "too expensive" and a $20 stock is "cheap" is comparing prices, not values.

The starting toolkit is simple: financial ratios. Listed companies report quarterly or half-yearly, and three statements matter most:

• Balance sheet: what the company owns and owes. Assets minus liabilities gives shareholders' equity, roughly what you are paying for when you buy a share

• Income statement: how well revenue turns into profit

• Cash flow statement: how cash moves in and out

[Check 1: Can the Company Pay Its Bills?]

The current ratio = current assets ÷ current liabilities. Below 1, the company may struggle to meet its short-term obligations, because liabilities exceed assets.

The slide shows two companies, both with a current ratio of 0.80. But look inside: Company A holds only $5,000 in cash and $80,000 in inventory, while Company B holds $30,000 in cash and $50,000 in receivables. The same ratio can hide very different situations. That is why the speaker said that once a ratio looks off, you "look deeper into why."

[Check 2: How Much Leverage Is It Using?]

The debt-to-equity ratio = total debt ÷ shareholders' equity.

In the slide's example, total debt of $163,000 against equity of $37,000 gives 4.41x. At first glance, a high ratio signals greater financial risk. But some businesses are simply structured that way. The speaker's advice: compare companies within the same sector. Line up ten peers and you will typically see a couple at the low end, most clustered together, and one outlier. That outlier may be using heavy leverage to chase growth. Ratios are relative.

[Key Takeaways]

• A cheaper price is not a cheaper stock. Value depends on what you get for the price.

• A current ratio below 1 is a flag, not a verdict. Look inside the numbers.

• Compare within a sector. A D/E ratio means little in isolation.

[Call to Action 🎯]

1. Open the balance sheet of a stock you own and work out its current ratio and D/E ratio.

2. Find two peers in the same sector and compare.

3. Drop a comment: which of your holdings looks different once you compare it with its peers?

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