The shares of Maiden Holdings, Ltd. (NASDAQ:MHLD) and New Gold Inc. (NYSE:NGD) were among the active stocks of the last trading sessions. Maiden Holdings, Ltd. (NASDAQ:MHLD) soared to 14.24% closing at the price of $3.29 whereas the shares of New Gold Inc. (NYSE:NGD) declined -2.4% with the decrease of -0.02 points closing at the price of $0.79. Maiden Holdings, Ltd. has currently decrease -50.9% in its stock over the period of 6-months while its rival New Gold Inc. subtracted -67.49% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Maiden Holdings, Ltd. (NASDAQ:MHLD) is -13.1% while the ROI of New Gold Inc. (NYSE:NGD) is -3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, MHLD’s EBITDA Margin is -6.91 whereas NGD’s is 4.36.
Both the profitability ratios suggest that New Gold Inc. (NYSE:NGD) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Maiden Holdings, Ltd. (NASDAQ:MHLD) reported $-0.13/share EPS for the previous quarter where analysts were predicting an EPS to be $0.26/share Thus lagging the analyst Estimates with a Surprise Factor of -150 Percent. While, New Gold Inc. (NYSE:NGD) reported EPS of $0.01/share in the last quarter. The analysts projected EPS of $0.01/share depicting a Surprise of 0 Percent.
Taking a look at Earnings per Share, New Gold Inc. tends to be beating the analyst estimates more than Maiden Holdings, Ltd.. so NGD is more profitable than MHLD.
Technical Analysis of Maiden Holdings, Ltd. & New Gold Inc.
Moving average convergence divergence (MACD) shows that Maiden Holdings, Ltd. (NASDAQ:MHLD) is on a PRICE RELATIVITY trend While New Gold Inc. (NYSE:NGD) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Maiden Holdings, Ltd. was in BULLISH territory and New Gold Inc. was in BULLISH territory.
MHLD’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While NGD’s candle is BEARISH with MEDIUM.
EPS Growth Rate: MHLD’s 12% versus NGD’s 9.61%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Maiden Holdings, Ltd. (NASDAQ:MHLD) is predicted at 12% while New Gold Inc. (NYSE:NGD) stands at 9.61%. These numbers suggest that MHLD is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of MHLD stands at 0 while NGD is at 3 whereas the debt ratio of the prior is 0.4 while the debt ratio of the later is 0.53.
The values of the both ratios suggest that NGD is more suitable investment when the liquidity and risk is the main concern.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 3 for MHLD and 2.7 for NGD which means MHLD has Hold rating whereas NGD has Hold rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for MHLD is $5 which is 34.2% of its current price while NGD has price target of 3.81 which is 79.27% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
MHLD currently has price to earning P/E ratio of 0 whereas NGD has 0 while the forward P/E ratio for the prior stands at 3.21 and for the later it depicts the value of 0.
The price to Book P/B for MHLD is 0.43, Price to Sale is at 0.08 and for NGD these ratios stand at 0.25 and 0.66.