Editors' Note: This article covers one or more micro-cap stocks. Please be aware of the risks associated with these stocks.
And here is our first installment for the year 2014 of our gold miners analyst watch series of articles. As in previous editions, we will be noting price targets and target changes in comparison with results published in our last installment at the start of December.
We continue to consider the following stocks (in alphabetical order): Agnico Eagle (NYSE:AEM), Alamos Gold (NYSE:AGI), Allied Nevada (NYSEMKT:ANV), AngloGold Ashanti (NYSE:AU), AuRico Gold (NYSE:AUQ), B2Gold (NYSEMKT:BTG), Barrick Gold (NYSE:ABX), Eldorado Gold (NYSE:EGO), Gold Fields (NYSE:GFI), Goldcorp (NYSE:GG), Harmony Gold (NYSE:HMY), IAMGOLD (NYSE:IAG), Kinross Gold (NYSE:KGC), McEwen Mining (NYSE:MUX), New Gold (NYSEMKT:NGD), Newmont Mining (NYSE:NEM), Primero Mining (NYSE:PPP), Randgold (NASDAQ:GOLD), Sibanye Gold (NYSE:SBGL), Yamana Gold (NYSE:AUY). And for the present edition, we have added St Andrew Goldfields (OTCQX:STADF) to our watch list.
We duly note that we source our data exclusively from Yahoo.com. Most companies considered for this article are covered by more analysts than reported in our database but unfortunately, not all of them provide their data to our source website.
The table below summarizes our data. The first three columns list the company names, ticker symbols and share prices 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 recommendations given by these analysts ranging from 1.0 (strong buy) to 5.0 (sell). This concludes the data sourced directly from Yahoo.com.
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 differences between the share price and the median target price. The column titled "high-low" gives the differences between the high and the low target. The last four columns titled "target change" document the changes in price targets since the December report with the last columns giving the average changes over the low, median and high price targets.
N.B. Data for St Andrew Goldfields was provided in Canadian Dollars and converted to US Dollars for the purpose of this article using a conversion rate of C$1.0 = US$0.92
N.B. Only one single analyst covering McEwen Mining also logged the data on Yahoo.com.
We tend to keep an eye on the difference between the current share price and the median price target and interpret this difference as a measurement for the potential of a stock. This value is given in column "median-price" and the diagram below.
New-comer to our watch list St Andrew Goldfields leads this ranking. The median price target for this small gold miner from the Timmins region is given 131% above the current share price. Following in a seemingly distant second place is former leader McEwen Mining and South African miners Harmony Gold and Gold Fields, which have been sneaking up the ranking in this category in recent months.
Sibanye Gold continues to bring up the rear with analysts stubbornly refusing to upgrade their view on this company despite strong showings in the second half of 2013.
Column "high-low" measures the divergence in analyst opinions. The results from this column in the table at the top of this article are visualized in the next diagram.
Allied Nevada continues to split analysts the most but the level of disagreement seems to be slowly reducing over the months as the share price is showing slow signs of recovery from an annus horribilis for the company. The price target ranges for IAMGOLD, Newmont, New Gold and Randgold also diverge by more than 100%.
Analysts achieve the greatest degree of consensus with price targets for Sibanye Gold closely followed by Primero Mining and Gold Fields.
Most companies had their price targets cut during the past month with notable exceptions being Eldorado Gold, Randgold and Yamana Gold who received a small upgrade and Sibanye Gold and Harmony Gold whose targets remained unchanged.
We note with interest the disproportionately severe price target cut for New Gold.
On average targets were reduced by -4.5% since early December.
A visualization for column "Recommendation" concludes our report. The little red bars indicate recommendation changes since last month. B2Gold is still held in the highest regards by analysts followed by Primero Mining and St Andrew Goldfields.
Allied Nevada and Sibanye Gold are still bringing up the rear. Adding insult to injury the recommendation for these two miners have been further reduced since our last update.
Despite rallying over New Year, the chart for the gold price is still maintaining a heavy look. We have expressed hopes for a rally starting after an initial period of weakness early in the year and are looking forward to having our predictions come true. The miners would certainly follow suit if the underlying metal could finally find its legs again.
Disclosure: I am long AEM. 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.