9 Fundamental Analysis Books You Need to Read - No BS Investing
Posted 275 views July 29, 2022, 10:00 - Elisabeth in Investing

9 Fundamental Analysis Books You Need to Read

As a value investor, you should complete a fundamental analysis before buying a company’s stock. You then have an in-depth understanding of your chosen company, the market, and the industry sector before making an investing decision. 

But how to begin? Here are nine fundamental analysis books that are perfect for both the beginner and expert value investor. Learn the tricks of the trade to successfully complete your own fundamental analysis.  

fundamental analysis books

Key Takeaways:

  • The Intelligent Investor by Benjamin Graham
  • Getting Started in Fundamental Analysis by Michael C. Thomsett
  • Fundamental Analysis for Dummies by Matt Krantz
  • Warren Buffett and the Interpretation of Financial Statements by Mary Buffett and David Clark
  • One Up on Wall Street by Peter Lynch
  • Margin of Safety by Seth A. Klarman
  • Beating the Street by Peter Lynch
  • The Little Book of Valuation: How to Value a Company, Pick a Stock and Profit by Aswath Damodaran
  • Security Analysis: Sixth Edition: Foreword by Warren Buffett

1. The Intelligent Investor by Benjamin Graham

Level: Beginner, Intermediate

The Intelligent Investor was written by the father of value investing, Benjamin Graham, in 1949. Despite its age, it’s considered to be the stock market Bible with several revisions to keep the information up to date. 

This book is filled with value investing strategies to generate profits, including how to complete a fundamental analysis. Below are some of the best chapters to learn about a fundamental analysis:

  • Chapter 1: Investment vs. Speculation
  • Chapter 3: A century of stock-market history
  • Chapter 5: The defensive investor and common stocks
  • Chapter 11: Security analysis for the lay investor
  • Chapter 14: Stock selection for the defensive investor
  • Chapter 20: Margin of safety as the central concept of investment

However, the entire book is well worth the read. You’ll learn how to take the emotions out of investing and become a patient, disciplined investor. 

Purchase The Intelligent Investor on Amazon. 

2. Getting Started in Fundamental Analysis by Michael C. Thomsett

Investor Level: Beginner, Intermediate

This book is actually a textbook, but extremely valuable even if you’re not in school. 

An excellent feature of this book is its practicality. It includes relevant illustrations, examples, and definitions. Here are some of the fundamental analysis principles you’ll learn:

  • the audited statement.
  • finding financial information online
  • the process of confirmation
  • balance sheet and income statement ratios
  • the P/E ratio and how to use it
  • how the combination of fundamental analysis with technical methods creates a powerful strategy

The book teaches the basics in an easy-to-understand way but also shares other tips such as how to identify risk, make valid and reliable comparisons, and pick stocks for your portfolio. 

Purchase Getting Started in Fundamental Analysis on Amazon. 

3. Fundamental Analysis for Dummies by Matt Krantz

Level: Beginner

If you’re brand new to fundamental analysis, this book is for you. The book clearly explains the various ratios of fundamental analysis and what each one means. But it doesn’t just give the “what;” it also provides the “why.” You’ll learn why fundamental analysis uses each ratio.

Below are a few important takeaways:

  • Predict the future value of a business based on its current and historical financial data
  • Gauge a company’s performance against its competitors
  • Determine if a company’s credit standing is in jeopardy
  • Apply fundamental analysis to other investment vehicles, like currency, bonds, and commodities

It also introduces new investors to more advanced concepts such as security analysis, business valuation, and accounting. 

Purchase Fundamental Analysis for Dummies on Amazon. 

4. Warren Buffett and the Interpretation of Financial Statements by Mary Buffett and David Clark

Level: Beginner, Intermediate

Learn the inner workings of Warren Buffett’s investing strategies with this guide for reading financial statements needed in fundamental analysis.

Filled with quotes and words of wisdom from the Oracle of Omaha himself, this book is broken into three main sections that teach you how to interpret

  • income statements
  • balance sheets
  • cash flow sheets

It’s written in layman’s terms, making it easy to understand. Each section is divided into short chapters describing each line item in the financial statement. Read through example companies that Buffett has invested in and learn how the financial numbers helped justify the investments.

Though not a long read, it’s very informative. You’ll discover key insights into Buffett’s general investment strategy as well. 

Purchase Warren Buffett and the Interpretation of Financial Statements on Amazon. 

5. One Up on Wall Street by Peter Lynch

Level: Beginner, Intermediate

As long as you’re a long-term investor, this book can offer a wealth of knowledge from one of America’s most successful money managers, Peter Lynch. 

It includes easy-to-follow advice for investing by reviewing a company’s financial statements and understanding which numbers really count. 

It also covers other helpful topics such as 

  • company/stock classification (slow/fast growers, stalwarts, turnarounds, etc.)
  • characteristics of a fast grower or 10-bagger.
  • overview of interest rates on the markets’ historical P/E ratio.

The book is written in an easy-to-read, conversational tone, including stories from Peter Lynch’s own investing experiences. 

“It takes remarkable patience to hold on to a stock in a company that excites you, but which everybody else seems to ignore,” says Lynch in the book. “You begin to think everybody else is right and you are wrong. But where the fundamentals are promising, patience is often rewarded.”

Purchase One Up on Wall Street on Amazon. 

Related: How to Analyze Company Fundamentals

6. Margin of Safety by Seth A. Klarman

Level: Beginner, Intermediate

In this book, you’ll learn how to value invest, including calculating the margin of safety. 

The margin of safety is the percentage difference between the stock price of a company and the actual or intrinsic value of a company. It helps you determine a safe price to invest in high-quality companies after you’ve analyzed their fundamentals.

The book is broken into three parts:

  • Part 1: Discover how most investors stumble and fall to emotions. 
  • Part 2: Understand the core fundamentals of value investing including the importance of the margin of safety. 
  • Part 3: Learn what a value-oriented investment process looks like and where to look for investment opportunities. 

Klarman will help you learn how to generate wealth over time while balancing your investment risk

Purchase Margin of Safety

Related: How to Use the Margin of Safety Formula for Value Investing

7. Beating the Street by Peter Lynch

Level: Beginner, Intermediate

Another read packed full of investing knowledge from Peter Lynch, Beating the Street shows you how you can become a company expert before investing (and how you can do better than fund managers).

“Behind every stock is a business. Find out what it’s doing,” says Lynch. In the book, he breaks down how to understand a company, including his step-by-step strategies for picking stocks. 

Lynch is well-equipped to share this information. He chose winning stocks (and missed a few) for a $12 billion fund. During one five-year period in the 1980s, he helped earn investors a 300% return! 

Lynch shares all of his tips in a fun, easy-to-read way, letting his humor shine.

Purchase Beating the Street on Amazon. 

8. The Little Book of Valuation: How to Value a Company, Pick a Stock and Profit by Aswath Damodaran

Level: Intermediate, Experienced 

Learn how to successfully value a company in this quick read. Though perhaps not best for beginners, this book is an excellent resource if you already understand some investing and financial lingo.

Topics include

  • Time value of money and the concept of risk
  • Explanation of financial statements
  • Intrinsic valuations and the appropriate discount rates
  • Financial metrics
  • How to value companies at different stages in their life cycles

Other chapters cover valuation issues/techniques for banks and other financial entities and how to value companies with significant intangibles.

The book also includes case studies and real-life examples that will help build your valuation skills and links to additional resources. 

Purchase The Little Book of Valuation on Amazon. 

9. Security Analysis: Sixth Edition: Foreword by Warren Buffett

Level: Intermediate, Experienced 

According to the book’s foreword by Buffett, this book is “A road map for investing that I have now been following for 57 years.”

Written by Buffett’s mentor, Benjamin Graham, and David Dodd, this book is considered to be one of the most influential financial books ever written. The book covers timeless value investing philosophy and techniques.

It’s not for the faint of heart though. The book is very detailed and requires careful study. We recommend reading some of the other books on this list first. But it is a great resource if you’re a more experienced investor. 

Purchase Security Analysis: Sixth Edition on Amazon. 

Read these fundamental analysis books to become a better value investor

Warren Buffett once said, “The best investment by far is anything that develops yourself, and it’s not taxed at all.” View fundamental analysis books, articles, and videos as an investment in yourself to become a successful value investor. 

Nervous about completing a fundamental analysis manually? You can use a fundamental analysis tool to simplify the process. We recommend Investing Pro Plus. This tool helps you easily evaluate stock fundamentals. Sign up for a free trial for Investing Pro Plus here

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Elisabeth O. is an MBA graduate with a specialization in International Finance & Investments and over six years of financial writing experience. She is passionate about long-term investing to build wealth, avoids day trading and speculations, and loves a good Warren Buffet quote.