Editors' Note: This article covers one or more micro-cap stocks. Please be aware of the risks associated with these stocks.
As the month of November is slowly gathering some steam we are pleased to provide yet another monthly update of our analyst watch for primary silver mining companies. As in previous installments we are summarizing our observations of analysts' price targets as published on Yahoo.com. In the present November edition comparisons will be made to the data presented roughly a month ago in our October edition.
As always we would like to take note of the fact that most companies considered for this article are covered by more analysts than reported in our data since this article only considers analyst reports available through Yahoo.com.
As in previous reports we included the following silver miners in alphabetical order: Coeur Mining (NYSE:CDE), Endeavour Silver (NYSE:EXK), First Majestic Silver (NYSE:AG), Fortuna Silver Mines (NYSE:FSM), Hecla Mining (NYSE:HL), Pan American Silver (NASDAQ:PAAS), Silver Standard (NASDAQ:SSRI), Silvercorp Metals (NYSE:SVM) and SilverCrest Mines (NYSEMKT:SVLC). And we would like to welcome Great Panther Silver (NYSEMKT:GPL) as a new entry in our watch list.
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 numbers 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 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 October report with the last column giving the average change over the low, median and high price targets.
Shares trading significantly below the median price target can be viewed as having a greater potential than shares trading close to this target and therefore values in column "median-price" can give some indication on the potential of a stock. A diagram visualizing this difference for each considered silver mining stock is given below.
We would like to caution that this way of thinking does not apply for companies that have had significant events moving the share price in recent times since analysts will take their time to update their data accordingly.
The difference between the high and the low targets represents a measure for the divergence in analyst opinions. Column "high-low" documents this difference and the diagram below visualizes it. This divergence in analyst targets is greatest for Coeur Mining and Silver Standard. The price target range is smallest for SilverCrest, Great Panther Silver and SilverCorp.
Column "target change average" lists the average changes in price targets during the past month and the diagram below illustrates them.
Most monitored price targets were lifted in the observed period, but the overall average target change still computed as a negative number, -1% to be precise, due to the hefty cut to SilverCorp's price targets. SilverCrest Mines stands out on the up-side of the spectrum with a sizeable increase in price targets, presumably following the presentation of the positive PEA for the La Joya project. Also of note is the increase in price targets for Endeavour Silver breaking a long series of target cuts during past months and rewarding the company's efforts at the El Cubo mine.
The final diagram illustrates column "Recommendation" from the table above. The little red bars in this diagram indicate changes in analysts' recommendation from last month.
Fortuna Silver has joined First Majestic Silver in pole position in this ranking, followed by SilverCrest Mines and Great Panther Silver. PanAmerican Silver is apparently the least-liked silver miner by analysts. Also of note is the down-grade of last month's darling SilverCorp Metals.
Our pick of the month
The past month has seen a number of strong showings in the silver space, despite difficult market conditions caused by volatile spot price action. In this context we would like to commend the sector as a whole for adapting to the new normal and finding ways to be profitable despite the mentioned challenges.
Disclosure: I am long AG, EXK, SVLC, HL. 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.