Precious Metal Streamers Analyst Watch: August Edition

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 |  Includes: FNV, RGLD, SAND, SLW
by: Itinerant

Throughout this year we have been keeping records of analyst data provided free of charge through Yahoo.com. In our data base we are tracking four precious metal streaming companies: Silver Wheaton (NYSE:SLW), Franco Nevada (NYSE:FNV), Royal Gold (NASDAQ:RGLD) and Sandstorm Gold (NYSEMKT:SAND).

These streaming companies provide venture capital for mining companies in exchange for an interest in mine production. This article summarizes our data gathered at the start of August and compares current targets to those reported in our last article in this series dating back to early June.

In response to some comments we have received we would like to note that the companies mentioned herein may have more analysts following their progress than considered in this article. However, not all of these analysts provide their targets to Yahoo.com which is the source of the base data for this article.

The table below summarizes our data. The first three columns list the company name, ticker symbol and share price at the time of writing. Price targets (low, median and high) are listed in the following three columns. These targets are followed by a column giving the number of analysts providing data to Yahoo.com and the mean recommendation given by these analysts ranging from 1.0 (strong buy) to 5.0 (sell). This concludes the data sourced directly from Yahoo.com.

Moving further to the right of the table, the following columns are colored in light green and contain data derived from our source data. These data points are given in percentages related to the share price at the time of writing.

The column titled "median-price" gives the difference between the share price and the median target price. The column titled "high-low" gives the difference between the high and the low target. The last four columns titled "target change" document the changes in price targets since the June report with the last columns giving the average change over the low, median and high price targets.

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The four diagrams below visualize four columns from the table above:

"Median-price". A relatively high difference in between the current share price and the median price target can potentially indicate a high potential for share price increase during the coming 12 months.

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"High-low". Small differences between high and low targets indicate that analysts concur in general on the price targets whereas a high difference indicate diverging analyst opinions.

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"Target change average". This indicates the average target change since early June.

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"Recommendation". The analysts investment recommendation expressed on a scale from 1 to 5.

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Our pick of the month

Price targets have dropped by 34.4% on average during the past two months following the general trend of precious metal miners and the underlying commodity prices in general. A bottom might be forming right now but we advise caution until this thesis is confirmed.

Sandstorm Gold seems to have the largest potential of the streaming companies according to the analysts. There is also the greatest degree of agreement between individual price targets for this company along with the smallest target cuts since June and a rather favourable recommendation score (keeping in mind that only two analysts are providing targets for this company on Yahoo.com).

From this data it would appear that Sandstorm Gold is favoured by analysts at this point in time.

Disclosure: I am long SAND, SLW. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.