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Premier Gold Mines, Alamos Gold, Vale and Agrium were among the companies that analysts saw as offering the best upside for resource investors.
The following resource companies were mentioned by analysts during the week of October 29 – November 4. This information, to be used for the purpose of evaluating potential investments, was distilled from a daily list of analyst upgrades, downgrades and initiations compiled by Analyst Ratings Network.
Premier Gold Mines Ltd. (TSX:PG) is exploring gold projects in Ontario and Nevada, two of which are located in Nevada’s Carlin and Battle Mountain trends. The Rahill-Bonana joint venture in Ontario is the last piece of the Red Lake mine trend not owned by Goldcorp (NYSE:GG, TSX:G), according to Premier. On Oct. 29 the company updated the mineral resource estimate at its Hardrock Deposit in Ontario — highlighting indicated resources of 3.24 million ounces of gold and 3.78 million ounces inferred. Premier Gold Mines is now covered by analysts at Scotiabank. They set an “outperform” rating and a C$4.75 price target on the stock. 100.4% upside.
SM Energy Co. (NYSE:SM) explores for and produces crude oil and and natural gas in North America. Operations are focused in the South Texas & Gulf Coast, Mid‑Continent, Rocky Mountain and Permian regions. In its Q3 results, SM Energy reported record quarterly average daily production of 138.8 million barrels of oil equivalent (mboe) per day at top end of guidance range of 132 to 139 mboe per day. Net income was $70.7 million or $1.04 a share compared a net loss of $38.3 million or $0.58 a share in Q3 2012. SM Energy was upgraded by analysts at Topeka Capital Markets from a “hold” rating to a “buy” rating. They now have a $120.00 price target on the stock, up previously from $80.00. 37.2 percent upside.
Twin Butte Energy (TSX:TBE) is an oil & gas company based in Calgary, Alberta. The company has approximately 17,800 barrels of oil equivalent a day (boed) of production with a focus on heavy oil in the greater Lloydminster area along the Alberta and Saskatchewan border. Twin Butte last week closed a $70 million bought deal financing. Twin Butte Energy was upgraded by analysts at TD Securities from a “hold” rating to a “buy” rating. They now have a $3.00 price target on the stock, up previously from$2.50. 35.1 percent upside from the previous close of $2.22.
Valero Energy Corp. (NYSE:VLO) is a Texas-based manufacturer and a marketer of transportation fuels, other petrochemical products and power. San Antonio Business Journal reported on Monday that the company was awarded a $330.9 million Defense Department contract to supply jet fuel for the Israeli military. Valery Energy was upgraded by analysts at Cowen and Company from a “market perform” rating to an “outperform” rating. They now have a $52.00 price target on the stock. 26.3 percent upside from the previous close of $41.17.
Alamos Gold Inc (NYSE:AGI, TSX:AGI) is exploring for and mining precious metals in Mexico and Turkey. Highlights from the third quarter included sales of 48,000 ounces of gold and the completion of the previously announced Esperanza Resource Corp acquisition for $69.4 million, and Orsa Ventures, acquired for $3.4 million. Alamos Gold was upgraded by analysts at Canaccord Genuity from a “hold” rating to a “buy” rating. They now have a $20.00 price target on the stock. 25.2 percent upside from the previous close of $15.97.
Vale (NYSE:VALE), the world’s largest producer of iron ore and the second biggest nickel producer, was upgraded by analysts at Stifel Nicolaus from a “hold” rating to a “buy” rating. They now have a $20.00 price target on the stock. 24.9 percent upside from the previous close of $16.02. Last month, it was announced that in order to cut costs, commodities giant Glencore Xstrata (LSE:GLEN) and Vale are once again talking about combining their nickel-mining operations in Canada‘s Sudbury Basin.
Agrium Inc (NYSE:AGU, TSX:AGU), a global producer and marketer of fertilizer, was upgraded by analysts at HSBC from a “neutral” rating to an “overweight” rating. They now have a $105.00 price target on the stock, up previously from $95.00. 22.7 percent upside from the previous close of $85.55. In its Q2 results, Agrium said it expects “solid demand for crop inputs in the second half of 2013 given positive grower sentiment, strong nutrient removal this year and the affordability of crop nutrients.”
Southwestern Energy Co. (NYSE:SWN) is the fifth largest producer of natural gas in the United States — with operations throughout North America including New Brunswick, Fayetteville Shale, Arkoma Basin, East Texas, Marcellus Shale and Brown Dense. Its Q3 gas and oil production was a record 172.4 billions of cubic feet equivalent (bcfe), up 19 percent compared to a year ago. Southwestern Energy was upgraded by analysts at Stifel Nicolaus from a “hold” rating to a “buy” rating, and by Wells Fargo & Co. to a “buy” rating. Both firms now have a $43.00 price target on the stock. 15.5 percent upside from the previous close of $37.22.
Securities Disclosure: I, Andrew Topf, hold stock in Goldcorp.
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