| NGD Stock | | | CAD 3.98 0.06 1.49% |
This module uses fundamental data of New Gold to approximate the value of its Beneish M Score. New Gold M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Check out
Correlation Analysis to better understand how to build diversified portfolios, which includes a position in New Gold. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as
signals in board of governors.
To learn how to invest in New Stock, please use our
How to Invest in New Gold guide.
At this time, New Gold's
Short and Long Term Debt Total is very stable compared to the past year. As of the 9th of December 2024,
Long Term Debt is likely to grow to about 514.9
M, while
Net Debt is likely to drop about 194.2
M. At this time, New Gold's
Sales General And Administrative To Revenue is very stable compared to the past year. As of the 9th of December 2024,
Average Inventory is likely to grow to about 18.6
M, while
Price To Sales Ratio is likely to drop 1.21.
At this time, New Gold's M Score is inapplicable. The earnings manipulation may begin if New Gold's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by New Gold executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of New Gold's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-3.26
Beneish M Score - Inapplicable
| Elasticity of Receivables | |
| Financial Leverage Condition | |
New Gold Beneish M-Score Indicator Trends
The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if New Gold's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
New Gold Beneish M-Score Driver Matrix
One of the toughest challenges investors face today is learning how to quickly synthesize historical
financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between New Gold's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards New Gold in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find New Gold's degree of accounting gimmicks and manipulations.
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About New Gold Beneish M Score
M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled
The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed
financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.
New Gold Earnings Manipulation Drivers
Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as New Gold. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
About New Gold Fundamental Analysis
The Macroaxis Fundamental Analysis modules help investors analyze New Gold's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of New Gold using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at
the intrinsic value of New Gold based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing
financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our
fundamental analysis page.
Pair Trading with New Gold
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if New Gold position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in New Gold will appreciate offsetting losses from the drop in the long position's value.
The ability to find closely correlated positions to New Gold could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace New Gold when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back New Gold - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling New Gold to buy it.
The correlation of New Gold is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as New Gold moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if New Gold moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for New Gold can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
When determining whether New Gold is a strong investment it is important to analyze New Gold's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact New Gold's
future performance.
For an informed investment choice regarding New Stock, refer to the following important reports: Check out
Correlation Analysis to better understand how to build diversified portfolios, which includes a position in New Gold. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as
signals in board of governors.
To learn how to invest in New Stock, please use our
How to Invest in New Gold guide.
You can also try the
Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Please note, there is a significant difference between New Gold's value and its price as these two are different measures arrived at by different means. Investors typically determine if New Gold is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, New Gold's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.