Is New Gold (NGD) Stock Undervalued Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is New Gold (NGD). NGD is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 12.20. This compares to its industry's average Forward P/E of 17.36. NGD's Forward P/E has been as high as 33.27 and as low as -15.29, with a median of 12.45, all within the past year.
Investors should also recognize that NGD has a P/B ratio of 1.07. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.09. Within the past 52 weeks, NGD's P/B has been as high as 1.16 and as low as 0.60, with a median of 0.82.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. NGD has a P/S ratio of 1.25. This compares to its industry's average P/S of 3.7.
Finally, our model also underscores that NGD has a P/CF ratio of 5.66. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. NGD's current P/CF looks attractive when compared to its industry's average P/CF of 12.27. Over the past 52 weeks, NGD's P/CF has been as high as 11.54 and as low as 3.27, with a median of 6.03.
These figures are just a handful of the metrics value investors tend to look at, but they help show that New Gold is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, NGD feels like a great value stock at the moment.
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New Gold Inc. (NGD) : Free Stock Analysis Report
