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Executive summary:

  • This is a report on analyst data for precious metals streamers.
  • Share prices have moved up by almost 20%, but price targets have dropped slightly during the past month.
  • Silver Wheaton remains the streaming company with the highest rating despite a comparatively weak showing since the start of the year.

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Streaming companies provide venture capital for mining companies in exchange for an interest in mine production. Such companies offer leveraged exposure to the underlying commodity at a reduced risk compared to mining companies.

Our February updates on analyst data for gold miners and silver miners is complemented, as always by the present update for precious metal streaming companies. This February edition summarizes our current data on price targets and recommendations and reports on changes since our January edition in this series.

In our data base we are considering four precious metal streaming companies: Silver Wheaton (NYSE:SLW), Franco-evada (NYSE:FNV), Royal Gold (NASDAQ:RGLD) and Sandstorm Gold (NYSEMKT:SAND).

Not all analysts release their predictions to Yahoo.com. Instead, in many cases analyst data are considered as proprietary information only available to subscribers of the analysts' services. It is for this reason that our database may consider fewer analysts than actually follow some of the companies.

The table below summarizes our data. Grey columns represent data sourced directly from Yahoo.com, and light green colored columns represent processed data derived from this source data.

The first three columns list the company names, ticker symbols and share prices at the time of writing, followed by the change in share price since the last edition.

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 remaining columns list data points computed as percentages of the share prices at the time of writing as given in the third column. The column titled "median-price" gives the differences between the share prices and the median target prices. The column titled "high-low" gives the differences between the high and the low targets. The last four columns titled "target change" document the changes in price targets since the January report, with the last column giving the average changes over the low, median and high price targets.

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We have added a new chart to our article format for this series illustrating the share price change since last month.

Shares of Sandstorm Gold have appreciated just shy of 25% during the past month, and share price gains for Royal Gold and Franco-Nevada are not far behind. Silver Wheaton is lagging with gains of only 9.6% since early January. On average the four companies have rallied 19.5% since our last article in this series about a month ago.

A relatively high difference between the current share price and the median price target can indicate a high potential for a share price increase during the coming 12 months. Caution needs to be exercised, however, since catalytic events typically take some time until they are reflected in analysts' price targets.

Silver Wheaton is trading 19.8% below the median price target, indicating the greatest potential for the largest streaming company. Of course, this potential is also owed to the comparative laggard share price performance of Silver Wheaton in past weeks. Franco-Nevada on the other hand has traded up to a level of 11.8% above the median share price target.

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Small differences between high and low targets indicate that analysts concur on the price targets whereas a high difference indicates diverging analyst opinions. The chart below illustrates the price target range for the four companies in our watch list.

Disagreement among analysts is greatest for Silver Wheaton and Franco-Nevada. Remarkably, despite the turbulence surrounding the Colossus, stream analysts are very agreeable about price targets for Sandstorm Gold.

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The next diagram visualizes the average target change since the beginning of January. Remarkably, price targets have been cut by an average of -1% despite the strong share price performance.

This average is driven by cuts to Silver Wheaton's and Sandstorm Gold's targets. Targets for Franco-Nevada remained practically unchanged, and Royal Gold's targets were actually upgraded.

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The analysts' investment recommendation expressed on a scale from 1 to 5 with 1 indicating a "strong buy," and 5 indicating a "sell" recommendation is illustrated below.

Unchanged from last month, Silver Wheaton remains the darling of analysts, and despite continuing strong performance Franco-Nevada remains at the rear of this ranking.

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The final diagram for this article shows the relative performance of the four considered companies since the start of the year.

SAND Chart

SAND data by YCharts

Source: Precious Metal Streamers Analyst Watch: February Edition