The average target price of NCAU.V is 1.2 and suggests 89% upside potential. Usually, this means a BUY recommendation among investment firms, or a recommendation to increase one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 1.2. This translates into 89% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 1.0. This suggests 64% upside potential. Even the most pessimistic analyst believes there will be stock growth. 

Newcore Gold Ltd., a mineral exploration and mine development company, engages in the acquisition, advancement, and development of precious mineral properties in Ghana. It holds 100% interest in the Enchi gold project covering 216 square kilometers located in southwest Ghana, as well as holds seven prospecting licenses. The company was formerly known as Pinecrest Resources Ltd. and changed its name to Newcore Gold Ltd. in August 2020. Newcore Gold Ltd. was incorporated in 2010 and is headquartered in Vancouver, Canada.

Canada

Newcore Gold Ltd.

Basic Materials

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

NCAU.V reported revenue of CAD 0mn in the last 12 months, down 0% from FY23. The dynamics of cash flow, as measure by free cash flow (FCF), were rather similar. EPS fell 5% from FY23 to CAD -0.02. Market expects EPS to reach CAD -0.04 in FY24.

The stock's performance has been mixed in the past six months, with growth following a decline. The stock has outperformed its global peers from the same sector and industry (as shown above), surpassing them by 71ppts in total. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is 'fair'.

Another important profitability metric, return on assets (RoA), amounted to -5.7% in the last 12 months, an increase from -6.2% in FY22. 

In the last 12 months, the return on capital employed (RoCE) grew to -5.7%, below the peers. 

Newcore Gold Ltd. reported a return on equity (RoE) of -5.7% in the last 12 months, up from -6.3% in FY22. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -1.0 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

NCAU.V has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity is usually stable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a very small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors and we point to weak positions in its industry, negligible return on capital. We note an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, NCAU.V is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, NCAU.V is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

Based on key historical and expected multiples, the stock is slightly overvalued relative to its peers. 

Newcore Gold Ltd.

CA$ 0.61

3

Newcore Gold Ltd.

CA$ 0.61

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

CA$ 0.61

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