Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model. NEW YORK ( TheStreet) -- New Gold (AMEX: NGD) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, increase in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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- The revenue growth greatly exceeded the industry average of 6.5%. Since the same quarter one year prior, revenues rose by 41.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.32, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 4.19, which clearly demonstrates the ability to cover short-term cash needs.
- NEW GOLD INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, NEW GOLD INC increased its bottom line by earning $0.41 versus $0.38 in the prior year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 254.0% when compared to the same quarter one year prior, rising from $35.00 million to $123.90 million.
- The gross profit margin for NEW GOLD INC is rather high; currently it is at 58.10%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 49.38% significantly outperformed against the industry average.
-- Written by a member of TheStreet Ratings Staff