Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified New Gold as such a stock due to the following factors:
- NGD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.1 million.
- NGD has traded 1.1 million shares today.
- NGD is trading at 6.15 times the normal volume for the stock at this time of day.
- NGD is trading at a new low 10.05% below yesterday's close.
'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.
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More details on NGD:
New Gold Inc., a gold mining company, is engaged in the acquisition, exploration, development, and operation of mineral properties. It primarily explores for gold, silver, and copper deposits. Currently there are 5 analysts that rate New Gold a buy, no analysts rate it a sell, and 4 rate it a hold.
The average volume for New Gold has been 3.0 million shares per day over the past 30 days. New has a market cap of $2.2 billion and is part of the basic materials sector and metals & mining industry. Shares are down 20.2% year-to-date as of the close of trading on Wednesday.
rates New Gold as a
. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, feeble growth in its earnings per share and generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- 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, NEW GOLD INC's return on equity significantly trails that of both the industry average and the S&P 500.
- NEW GOLD INC reported flat earnings per share in the most recent quarter. 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.
- NGD's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 27.35%, which is also worse than the performance of the S&P 500 Index. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- NGD, with its decline in revenue, slightly underperformed the industry average of 0.7%. Since the same quarter one year prior, revenues slightly dropped by 2.9%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
- 46.49% is the gross profit margin for NEW GOLD INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.09% trails the industry average.
- You can view the full New Gold Ratings Report.