Checking if NEW GOLD INC (NYSEARCA:NGD) meets Minervini’s stock selection rules

Our stock screener has spotted NEW GOLD INC (NYSEARCA:NGD) as a stocks which checks several boxes as specified by Mark Minervini. We will dive into an analysis below.

Checking the Minervini Trend Template.

The Minervini Trend Template is a set of technical criteria designed to identify stocks in strong uptrends. We can check all the boxes for NGD:

• ✔ Relative Strength is above 70.
• ✔ Current price is within 25% of it's 52-week high.
• ✔ Current price is at least 30% above it's 52-week low.
• ✔ The current price is above the 50-, 150- and 200-day SMA price line.
• ✔ The SMA(200) is trending upwards.
• ✔ The SMA(150) is above the SMA(200)
• ✔ The SMA(50) is above the SMA(150) and the SMA(200)

Assessing Growth for NGD

ChartMill assigns a High Growth Momentum Rating (HGM) to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth and profitability elements, including EPS and revenue growth, accelleration, surprises and revisions. In the case of NGD, the assigned 5 reflects its growth potential:

Explosive Earnings Growth

• The EPS of NGD has exhibited growth from one quarter to another (Q2Q), with a 800.0% increase. This underscores the company's ability to generate higher earnings and improve its financial standing.
• NGD shows accelerating EPS growth: when comparing the current Q2Q growth of 800.0% to the previous quarter Q2Q growth of 167.0%, we see the growth rate improving.
• Sales growth accelerated for 3 quarters in a row.
• NGD has experienced 171.0% growth in EPS over a 12 month period, demonstrating its ability to generate sustained and positive earnings momentum.
• NGD has demonstrated strong q2q revenue growth of 31.63%, suggesting a favorable trend in the company's financials and indicating the potential for continued expansion.
• Accelerating Sales growth for NGD: the current Q2Q growth of 31.63% exceeds the previous quarter Q2Q growth of 25.19%.
• Sales growth accelerated for 3 quarters in a row.
• With a track record of beating EPS estimates in the last 4 quarters, NGD showcases its consistent ability to deliver earnings surprises. This reflects the company's strong execution and its competitive position in the market.

Financial Strength & Profitability

• The operating margin of NGD has seen steady growth over the past year, signaling improved profitability. This trend indicates the company's effective cost management and its ability to generate higher returns.
• With a favorable trend in its free cash flow (FCF) over the past year, NGD demonstrates its ability to generate robust cash flows and maintain financial stability. This growth reflects the company's focus on efficient capital allocation and cash management.
• NGD has a Debt/Equity ratio of 0.38, indicating a balanced approach to financing growth.

Institutional Confidence & Market Strength

• With 61.98% of the total shares held by institutional investors, NGD showcases a healthy distribution of ownership. This suggests a mix of institutional and retail investors, fostering a dynamic market for the stock.
• NGD has exhibited strong Relative Strength(RS) in recent periods, with a current 97.76 rating. This indicates the stock's ability to outperform the broader market and reflects its competitive position.

How do we evaluate the setup for NGD?

ChartMill incorporates a Setup Rating in its analysis, which measures the extent of consolidation in a stock over recent days and weeks. This rating, ranging from 0 to 10, is updated daily and takes into account multiple short-term technical indicators. The current setup rating for NGD is 3:

Although NGD has an excellent technical rating, it does not present a decent entry opportunity at the moment. Price movement has been a little bit too volatile to find a nice entry and exit point. It is probably a good idea to wait for a consolidation first.

Our latest full technical report of NGD contains the most current technical analsysis.

Final Thoughts

It looks like NEW GOLD INC meets the Minervini criteria. More high growth momentum breakout stocks can be found in our High Growth Momentum + Trend Template screen.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.