New Gold Inc (NYSEARCA:NGD) Passes Rigorous Growth Stock Screen

A methodical process for growth investing can help investors find companies with good possibilities for future increase. One recognized system comes from Louis Navellier's "The Little Book That Makes You Rich," which lists eight distinct guidelines for choosing high-quality growth stocks. These measures concentrate on earnings estimate changes, income increase, profit margin improvement, and monetary soundness to find companies showing quickening business activity. A recent filter using these measures has found New Gold Inc (NYSEARCA:NGD) as matching the approach's strict standards.

Earnings Estimate Changes and Surprises

The Little Book method gives notable importance to analyst opinion and earnings results, as higher estimates and repeated positive differences frequently point to basic business health that may not be completely shown in present stock prices. New Gold shows very good results in these categories:

• Next-quarter EPS estimates have been increased by 25.8% over the last three months
• The company has reported four straight positive earnings differences
• Average earnings difference over the previous four quarters is 47.2%

These numbers imply analysts are repeatedly adjusting their forecasts upward to match New Gold's real results, a trait Navellier finds is frequent in developing growth companies.

Income and Earnings Increase

Speeding up increase forms the center of the Little Book system, with the idea that companies displaying improvement in several measures frequently maintain that path. New Gold's increase measures greatly pass the method's minimum levels:

• Quarterly income increase of 83.5% year-over-year
• Yearly income increase of 44.2%
• Quarterly EPS increase of 212.5%
• Yearly EPS increase of 309.1%

These increase rates notably exceed the method's lowest needs of 20% for income increase and 15% for earnings increase, showing solid business improvement.

Profitability and Cash Flow Improvement

The method notes that increase should lead to better profitability and cash production, making sure improvement is financially maintainable. New Gold's performance here is especially significant:

• Operating margin improvement of 195% over the last year
• Free cash flow improvement of 388.8% each year
• Return on equity of 20.1%

The large improvement in operating margins suggests the company is reaching operational effectiveness together with income increase, while the high free cash flow improvement gives monetary options for more investment or lowering debt.

Fundamental Evaluation Summary

New Gold's complete fundamental analysis report gives the company a total rating of 6 out of 10, with especially high grades in profitability (7/10) and growth (8/10). The valuation rating of 8/10 implies the stock seems fairly valued compared to its increase prospects. While the company does very well in return measures and margin performance, investors should be aware of issues about monetary condition, especially related to liquidity measures that are below industry norms.

Investment Points

For investors using the Little Book method, New Gold offers a strong case with its wide-ranging ability in increase measures. The company's performance in earnings estimate changes, positive differences, and several increase areas fits well with Navellier's structure for finding growth stocks before they become broadly known. The mix of good increase measures with fair valuation multiples forms a notable profile for investors focused on growth.

The filtering method that found New Gold can produce other possible choices for growth investors. View present results from the Little Book method filter to find other companies meeting these increase measures.

Disclaimer: This examination is based on fundamental filtering measures and should not be seen as investment guidance. Investors should do their own investigation and think about their personal monetary situation before making investment choices. Previous results do not ensure future outcomes, and all investments have built-in risks.