Did Analysts Really Predict April MoPay Dog Upsides?

|
 |  Includes: ARR, AT, BTE, ERF, GAIN, GORO, HRZN, PGH, PSEC, VNR
by: Fredrik Arnold

Summary

Analysts expected 10 top monthly pay (MoPay) dividend dogs from April 2013 to show analyst mean target price upsides averaging over 30% by April 2014.

In reality, the ten showed an average loss of nearly 2% for the year.

Analysts projected average 34.3% 1 yr. net gains for GORO, BTE, PGH, ERF, AT, ARR, HRZN, PSEC, GAIN, & VNR.

In reality, the ten showed an average net gain of just 6.75% for the year.

Consider analyst 1 yr. mean target price projections as being 20% to 60% accurate for your MoPay dog dividend stock purchase research.

This divergence report started April 22, 2013 using closing prices for ten Monthly pay (MoPay) stocks selected by price upside from the following list of thirty:

The intent last April was to use analyst estimates as a "market sentiment" gauge of upside potential. Dow dividend dog theory picks from Yahoo! Finance sectors were supplemented with one year mean target price estimates reported by Yahoo! from broker analysts. A full year of reality has now passed to provide a full-term grade for the analyst April upside calls.

Wizards of Wall Street Weighed In

One year mean target price set by analysts multiplied by the number of shares in a $1k investment were used to compare ten stocks. The number of analysts providing price estimates was noted after the name for each stock. Three to nine analysts was considered optimal for a valid mean target price estimate.

Six April 2013 Monthly pay (MoPay) stocks boasted double digit percentage price upsides per analysts: Horizon Technology Finance Corporation (NASDAQ:HRZN) took the sixth slot at 10.95%. Atlantic Power Corporation (NYSE:AT) with 31.74% upside placed fifth. Enerplus Corp. (NYSE:ERF) with 32.71% took the fourth slot. Pengrowth Energy (NYSE:PGH) placed third with 36.42% estimated upside. Baytex Energy Corp. (NYSE:BTE) took second place with 40.86% estimated upside. Finally, Gold Resource Corporation (NYSEMKT:GORO) exhibited a 53.94% price upside to lead the April 2013 MoPay dogs. Four other firms back in the pack showed 6.26% to 9.44% analyst estimated upsides.

Wall Street Meets Main Street

April 22, 2013 closing prices compared to April 17, 2014 closing prices were reported and charted below.

The price comparison showed three stocks with double digit percentage upsides, and two with single digit upsides. Five were in negative territory: four in double digit percentages down and one in single digits. The best price upside was 70.88% posted by Enerplus Corp. The worst performer was Gold Resource Corporation at minus 52.92%. The average top ten MoPay April 2013 dog showed a 1.82% price downside.

The Road Between Wall Street & Main Street

Ten charts and graphs below document monthly price changes compared to analyst straight line incremental 1 yr target price projections. Five stocks showed higher prices after a year. Five showed lower. Only two stock charts roughly conformed to analyst upside predictions

(click to enlarge)Click to enlarge

(click to enlarge)Click to enlarge

(click to enlarge)Click to enlarge

(click to enlarge)Click to enlarge

(click to enlarge)Click to enlarge

Were Analysts Forecasts Improved by Including Dividends?

All ten April 2013 Monthly pay (MoPay) stocks were projected to show $148 or more in net gains by 2014 per analysts.

(click to enlarge)Click to enlarge

Net gain comparisons showed five stocks with triple digit dollar gains come 2014 based on dividends plus mean target price estimate from analysts less broker fees: Enerplus Corp. made $765.32; Pengrowth Energy made $454.14; Baytex Energy Corp. made $175.87; Gladstone Investment (NASDAQ:GAIN) made $138.69; Prospect Capital Corporation (NASDAQ:PSEC) had $120.99 in net gains.

One firm showed a double digit dollar gain: Vanguard Natural Resources (NASDAQ:VNR) showed $97.67, most of which was contributed by dividends. One firm had a single digit net gain: Horizon Technology showed $4.72 to the good wherein all but that remaining amount in dividends was chewed up by broker fees and a decline in stock price.

The last three MoPay dogs showed triple digit negative results based on dividends plus mean target price estimate from analysts less broker fees: Atlantic Power Corporation lost $270.00; Armour Residential REIT (NYSE:ARR) lost $275.49; the worst performer was Gold Resource Corporation at minus $536.89.

The average top ten MoPay April dog showed a $67.50 net gain.

The stocks listed above were suggested only as decent starting points for a MoPay dog dividend stock purchase research process in April, 2013. These were not recommendations.

Gains as reported did not factor-in any tax problems resulting from dividend, profit, or return of capital distributions. Consult your tax advisor regarding the source and consequences of "dividends" from any investment.

Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, recommendation or endorsement to buy or sell any security. Prices and returns on equities in this article except as noted are listed without consideration of fees, commissions, taxes, penalties, or interest payable due to purchasing, holding, or selling same.

Graphs and charts were compiled by R&R, LLC from data derived from www.indexarb.com; www.dividend.com; finance.yahoo.com; analyst mean target price by Thompson/First Call in Yahoo! Finance.

Disclosure: I am long ARR, AT, ERF, FSC, HRZN, PGH. 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.