Skip to main content

NEW YORK (TheStreet) -- Shares of New Gold Inc. (NGD) - Get New Gold Inc. Report are higher by 4.84% to $4.33 in late morning trading on Tuesday, as gold mining stocks get a boost from the rising price of the precious metal.

Gold for February delivery is gaining by 2.01% to $1,205.60 per ounce on the COMEX this morning.

Gold is rising today as the dollar weakens. The Wall Street Journal dollar index says the currency is lower by 0.63%.

Exclusive Report:Jim Cramer's Best Stocks For 2015

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Concerns regarding the outcome of the Greek election and tensions between Russia and the West also contributed to the rise in gold, reports.

TheStreet Recommends

Additionally, New Gold may also be getting a boost from Monday's announcement that the shareholders of Bayfield Ventures Corp. (BYVVF) have voted in favor of New Gold acquiring all of Bayfield's assets, including 100% interest in three mineral properties.

Bayfield has applied to the Supreme Court of British Columbia, where the company is based, in order to obtain final court approval. The hearing is expected to take place on December 30, and the deal is anticipated to become effective on or around January 1, New Gold said.

Separately, TheStreet Ratings team rates NEW GOLD INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate NEW GOLD INC (NGD) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • NEW GOLD INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, NEW GOLD INC swung to a loss, reporting -$0.38 versus $0.41 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 588.5% when compared to the same quarter one year ago, falling from $12.20 million to -$59.60 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, NEW GOLD INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The share price of NEW GOLD INC has not done very well: it is down 17.07% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • 44.36% is the gross profit margin for NEW GOLD INC which we consider to be strong. Regardless of NGD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NGD's net profit margin of -35.20% significantly underperformed when compared to the industry average.
  • You can view the full analysis from the report here: NGD Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.