For various reasons we had lost interest in our series monitoring analyst price targets and recommendations for gold mining stocks after our April edition, and the ensuing hiatus bears testimony to this change in focus. However, we have received messages and encouragement from readers prompting us to continue with our analyst reviews and here we are, ready to relent to popular demand.
Unchanged from the last piece in this series 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 (NYSEMKT:BTG), Barrick Gold (NYSE:ABX), Beadell Resources (OTCPK:BDREF), Eldorado Gold (NYSE:EGO), Gold Fields (NYSE:GFI), Goldcorp (NYSE:GG), Harmony Gold (NYSE:HMY), IAMGOLD (NYSE:IAG), Kinross Gold (NYSE:KGC), Lake Shore Gold (NYSEMKT:LSG), McEwen Mining (NYSE:MUX), New Gold (NYSEMKT:NGD), Newmont Mining (NYSE:NEM), Northern Star Resources (OTCPK:NESRF), Primero Mining (NYSE:PPP), Randgold (NASDAQ:GOLD), Regis Resources (OTC:RGRNF), Sibanye Gold (NYSE:SBGL), Silver Lake Resources (OTCPK:SVLKF), St Andrew Goldfields (OTCQX:STADF) and last but certainly not least Yamana Gold (NYSE:AUY).
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 last edition in this article series with the last column giving the average changes over the low, median and high price targets.
N.B. Price targets for St Andrew Goldfields, Lake Shore 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$0.93 .
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$0.93 .
N.B. McEwen Mining, Harmony Gold and St Andrew Goldfields only had entries from one single analyst. Sibanye Gold and Anglo Gold Ashanti only had two entries.
Share Price Change
The following diagram illustrates the change in share price since the last article in our series. The values illustrate the theoretical gain or loss in share price during this time.
Gold miners' share prices have increased by healthy 12.9% since the last edition and we recorded only 7 companies within our watch list of 27 with a share price that has fallen in this time frame.
Most notably we would like to point to Lake Shore Gold (+80%), Northern Star Resources (+52%) and Eldorado Gold (+45%) on the winner side of this chart. Allied Nevada (-24%) brings up the rear of this ranking.
Difference Between Share Price and Median Price Target
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 one possible measurement for the potential of a stock. This value is given in column "median-price" in the table at the start of this article, and is visualized in 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. Sibanye Gold is finally starting to get the recognition it deserves in your humble scribe's opinion and has moved away from the last place in this ranking. The rear is now brought up by Northern Star Resources which has been rising relentlessly and seems to have overshot in analysts' opinion.
Spread Between High and Low Price Target
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.
Price Target Changes
Price target changes are evenly distributed to the upside and the downside for our watch list as evidenced by the diagram below and the average price target change of just -0.1% since the last article in this series.
Sibanye Gold has received the greatest upgrade and Allied Nevada the greatest cut.
A visualization for column "Recommendation" concludes our report. The little red bars indicate recommendation changes since the last article in this series.
Harmony Gold's recommendation rating is driven by the single analyst providing data for this company on Yahoo.com; we take the rating of 1.0 for Harmony Gold with a grain or two of salt.
Not so for Lake Shore Gold which has jumped to the lead of this ranking on very strong operational results. Analysts appear to be thinking of Allied Nevada as the least attractive investment proposition in the gold miners universe as represented by our watch list.
Disclosure: The author is long AEM, BDREF, NESRF, RGRNF. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has 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.