This is the April edition of our gold miners analyst watch series where we monitor analyst price targets and recommendations for gold mining stocks. As always we would like to update our readers on the latest data and make comparisons with results published in our March edition.
Unchanged from last month we are considering the following stocks (in alphabetical order): Agnico Eagle (NYSE:AEM), Alamos Gold (NYSE:AGI), Allied Nevada (NYSEMKT:ANV), AngloGold Ashanti (NYSE:AU), Argonaut Gold (OTCPK:ARNGF), AuRico Gold (NYSE:AUQ), B2Gold (NYSE:BGT), 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), Lakeshore Gold (NYSEMKT:LSG), McEwen Mining (NYSE:MUX), New Gold (NYSEMKT:NGD), Newmont Mining (NYSE:NEM), Primero Mining (NYSE:PPP), Randgold (NASDAQ:GOLD), Sibanye Gold (NYSE:SBGL), St Andrew Goldfields (OTCQX:STADF), Yamana Gold (NYSE:AUY).
And additionally we would like to add four Australian gold-miners to our list: Regis Resources (OTCPK:RGRNF), Beadell Resources (OTCPK:BDREF), Silver Lake Resources (OTCPK:SVLKF) and Northern Star Resources (OTCPK:NESRF).
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 table but not all of them provide their data to our source website.
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 March report with the last column giving the average changes over the low, median and high price targets.
N.B. Price targets for St Andrew Goldfields, Lakeshore Gold and Argonaut Gold were provided in Canadian Dollars and converted to US Dollars for the purpose of this article using a conversion rate of C$1.0 = US$0.91 .
N.B. Price targets for Regis Resources, Beadell Resources, Silver Lake Resources and Northern Star Resources were provided in Australian Dollars and converted to US Dollars for the purpose of this article using a conversion rate of C$1.0 = US$0.92 .
The following diagram illustrates the change in share price since the last article in our series approximately one month ago. The values illustrate the theoretical gain or loss in share price during this time.
Gold miners' share prices have given back some of the gains recorded for the first two months of the year. Only three companies posted gains, namely Primero Mining (+9.3%), Sibanye Gold (+4.7%) and Gold Fields (+4.2%); whereas all other entries recorded losses during the past month, most notably Lakeshore Gold (-22.6%).
On average share prices dropped by -9.3% during the past month.
As in previous editions we have kept tabs 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. Caution is advised for stocks with recent catalytic events since analysts take their time updating their data on Yahoo.com.
St Andrew Goldfields still has the greatest potential going by this measure followed by McEwen Mining. And Sibanye Gold is still bringing up the rear in this ranking; despite outperforming peers this gold miner still has not convinced analysts as it seems.
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.
Silver Lake Resources seems to cause the greatest degree of divergence in analysts' opinions following its decision to put the loss-making Murchinson operations on care and maintenance. Allied Nevada and IAMGOLD also continue to be the source of some controversy among analysts.
The greatest degree of agreement among analysts is noted for South African miners Sibanye Gold, Harmony Gold, AngloGold Ashanti and Randgold.
The diagram below documents average target changes since our last report.
We note some considerable changes in price targets since last month's edition for two entries in our data base: price targets for McEwen Mining were lifted significantly; and Harmony Gold reversed last month's target upgrades.
On average targets were increased by 1.9% since early March.
A visualization for column "Recommendation" concludes our report. The little red bars indicate recommendation changes since last month.
Harmony Gold's upgrade in the recommendation rating is driven by the reduction in analysts providing data for this company; we take the rating of 1.0 for Harmony Gold with a grain or two of salt.
B2Gold continues to lead this ranking for the remaining stocks, and Sibanye Gold continues to bring up the rear.
Disclosure: I am long AEM, RGRNF, SVLKF, NESRF. 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.
Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.