New Gold Inc. (NGD) Loud Thud Doesn’t Negate The Long-Term Story

Despite closing -0.02 points lower on 14 March, New Gold Inc. (NYSE:NGD) remains a key investment for many, but the stock is also a popular trading vehicle. Here’s how to trade it using charts and trading levels Friday. The shares dropped -2.81 percent at $0.86 with a light trade volume of 2.218 million shares. After opening the session at $0.87, the shares went as high as $0.87 and as low as $0.84, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $498 million and now has 578.7 million shares outstanding. New Gold Inc. (NGD) stock has lost -33.36 percent of market value in 21 trading days.

NGD stock has a trailing 3-year beta of 0.42, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was -$0.9 a share in the trailing twelve months. The stock’s value has surged 13.6 percent year to date (YTD) against a decline of -64.91 percent in 12 month’s time. The company’s shares still trade -67.68 percent away from its 1-year high of $2.66 and 23.7 percent up from 52-week low of $0.69. The average consensus rating on the company is 2.7, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

New Gold Inc. (NGD) will probably climb 366.28 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $1.5-month high price target. This represents a whopping 74.42 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $0.98, which represents a return potential of 13.95 percent when compared to the closing price of the stock of $0.86 on Thursday, March 14. The lowest price target for the stock is $0.5 — slightly more than -41.86 percent from NGD’s current share price.

History has shown that shares in New Gold Inc. have gone down on 8 different earnings reaction days and are predicted to add 0.07 percent when the company reports upcoming earnings.

The stock is currently hovering around the first support level of $0.84. Below this, the next support is placed in the zone of $0.83. Till the time, the NGD stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 40.37 on daily chart, which may remain a cause for concern. If the price breaks below $0.83 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $0.87 mark may result into a pull-back move towards $0.88 level.

Further, it is sporting a 0.78 on the Price-to-Sales ratio. Compare this with the industry average P/S of 1.22. 75.1 percent is the gross profit margin for New Gold Inc. and operating margin sits at 0 percent. Along with this, the net profit margin is -86.9 percent.