Fundamental Strategies in Active Equity Investing

In the realm of active equity investing, fundamental strategies play a critical role in establishing a firm's competitive advantage. This investment approach focuses on analyzing financial statements, assessing management quality, and understanding industry trends to make informed investment decisions.

Consider an investment manager, ABC Capital, which employs a fundamental value investing strategy. The firm targets undervalued companies based on their intrinsic value identified through meticulous analysis of earnings, cash flows, and balance sheets. In your essay, discuss the key components of fundamental strategies that ABC Capital might use, the benefits of this approach in achieving superior returns, and potential limitations they might face in its application. Illustrate your answer with relevant examples.