The following video explains how to value a companies stock, also known as the fundamentals of a company.  It is wise to analyze a companies basic fundamentals if your deciding to trade that particular stock.

The Daily Telegraph have rated BAE Systems a buy.  BAE are Europes largest defence group, developing electronics and avionics for war planes, manufactures ammunition and builds submarines and tanks for the armed forces.

BAE has missed out on the “dash to trash” and its shares now hang at their three year lows.  This is now making this stock a great entry point for investors.  The reason why now is a good time to enter this stock is because last month they reported they had won over £1bn of new contracts relating to the Typhoon and Harrier fighter jet programmes.  Their order book is £46.5bn so this will add to their most substantial order book.

BAE also has cutting edge technology that will enable them to take advantage of the shift towards covert combat tactics against any terrorists or rogue states.

In 2008 they generated £1.6bn in operating cash flows on a turnover of £18.5bn.  They ended the year with positive net funds, providing plently of money to buy up acquisitions.  The stock looks cheap for a company that is a major top player in the science field.  Top analysts are forecasting 2009 sales and underlying EPS (earnings per share) of £20.5bn and 24.3p, rising to £21.8bn and 45.0p in 2010.

Recommedation: BUY @ 323P