Yahoo Finance Should Value Investors Buy New Gold (NGD) Stock?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is New Gold (NGD). NGD is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value.
NGD is also sporting a PEG ratio of 0.45. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. NGD's PEG compares to its industry's average PEG of 1.08. Over the last 12 months, NGD's PEG has been as high as 3.46 and as low as 0.20, with a median of 1.92.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. NGD has a P/S ratio of 1.61. This compares to its industry's average P/S of 3.46.
Finally, investors should note that NGD has a P/CF ratio of 7.31. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 11.23. Over the past year, NGD's P/CF has been as high as 9.01 and as low as 3.27, with a median of 5.21.
These are only a few of the key metrics included in New Gold's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, NGD looks like an impressive value stock at the moment.
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New Gold Inc. (NGD) : Free Stock Analysis Report
