Agnico-Eagle Mines stock forecast (NYSE:AEM)

A year ago, Agnico shares were north of $70. Prices crumpled to as low as $33, though, on news that the company was forced to close its Goldex mine in Quebec due to safety concerns. It looks like a recovery is well underway.

This post is part of series where we’re checking in on the Top 500 gold and silver mining stocks profiled in our book Top 500 Gold and Silver Mining Stocks: Metalproofing Your Portfolio from the Coming Inflation Shock.

Performance: First, let’s compare Agnico-Eagle’s performance against the AMEX Gold Bugs Index (HUI) – a basket of industry-leading gold stocks.

Time Span AGONF Performance HUI Performance
1 Month +9.5% +13%
3 Month +18.8% +3%
YTD +33% -12%

Agnico-Eagle Mines is one of the top-performing stocks in the HUI this year. The stock also happens to be the smallest component of the HUI with a 3.11 percent weighting. As the smallest component of the HUI, Agnico’s market cap still stands at a massive $8.28 billion. Since it’s smaller than some of its peers, though, share prices could be a bit more volatile.

Why we like Agnico: 1.66% dividend; More than 21 million ounces of gold reserves. By market cap, Agnico is Canada’s fifth-largest gold producer. In Q3 2011 alone, the company increased its production by 11 percent to 265,978 ounces of gold. According to their most recent numbers, they’ve got total proven and probable gold reserves nearing 21.3 million ounces. http://www.agnico-eagle.com/

Recent News: RBC Dominion Securities raised their price target on Agnico-Eagle to $53 a share last week. A year ago, shares were north of $70. Prices crumpled to as low as $33, though, on news that the company was forced to close its Goldex mine in Quebec due to safety concerns. On top of that, Agnico wrote off part of its investment in its Meadowbank mine in Nunavut.

RBC analyst Stephen Walker says things are finally looking up. “The company has shown its ability to ‘under-promise and over-deliver’ on its operating results and drive strong performance at its five operating mines,” he wrote in a note (per the Financial Post). “However, we believe investors expect to see the company deliver results that are sustainable and demonstrate future growth over the next 2-3 years.”

Agnico’s looking to the future with new exploration partnerships in Colombia and Alaska (with Miranda Gold) among other places.

Agnico paid out a dividend of $0.20 cents on Aug. 30. That’s up 25 percent over the company’s $0.16 dividend a year ago. Thanks to growing enthusiasm for gold and silver mining shares, I think RBC’s price target is low, and I wouldn’t be surprised to see shares north of $60 a year from now.

Check out our book Top 500 Gold and Silver Mining Stocks: Metalproofing Your Portfolio from the Coming Inflation Shock (pictured above) to uncover more undiscovered gold and silver mining stocks.

Related

15 gold price predictions for 2011

A number of influential traders and executives have publicly weighed in with gold price forecasts for 2011. Here’s a recap of the more memorable predictions from 15 trading professionals and individuals.

A number of influential traders and executives have publicly weighed in with gold price forecasts for 2011. Here’s a recap of the more memorable predictions:

Chuck Jeannes: Goldcorp Inc.’s (NYSE:GG) CEO sees gold at $1,500 an ounce as “easily achievable,” and he could see the price eventually rising as high as $2,300 if and when inflation sets in (The Street)

Dennis Wheeler: Coeur d’Alene Mines Corporation’s (NYSE:CDE) CEO “would not be surprised” if gold prices rose to $1,500-$1,600 an ounce in 2011 (Reuters)

Sean Boyd: Agnico-Eagle Mines Limited’s (NYSE:AEM) CEO argues gold at $1,600 an ounce in the next 12 months would “not be a stretch” (Reuters). “Gold will ultimately go above $2,000 and I think it’s going to go in steps so I could see $1,600 this year,” he tells The Street.

Mark Cutifani: The CEO of AngloGold Ashanti Limited (NYSE:AU) see gold range-bound between $1,300 and $1,500 an ounce in 2011 (The Street)

Rick Rule: The founder of Global Resource Investments, which was acquired by Sprott Inc. (TSE:SII), expects “some event-driven spike in metals prices.” “I have no earthly idea where gold will close, but to be a good sport and play the game, I’ll say $1,750,” he says (SeekingAlpha)

Aaron Regent: CEO of Barrick Gold Corporation (NYSE:ABX) tells The Street he believes the “forward curve would suggest a gold price in the $1,500 range” (The Street)

Ian McAvity: The founder of the Central Fund of Canada (CEF), Central Gold Trust (GTU), and Silver Bullion Trust (SBT.U) expects a “monetary panic” in the dollar or euro to push gold to $2,000-$2,400 per ounce this year or in 2012 (SeekingAlpha)

Mark Bristow: The CEO at Randgold Resources Ltd. (NASDAQ:GOLD) expected gold to rise as high as $1,500 an ounce (The Street)

Morgan Stanley (NYSE:MS): The investment bank has set a gold price target of $1,512 an ounce for gold in 2011 (The Street)

Ross Norman: The co-founder of TheBullionDesk.com is looking for gold to trade between $1,350 and new all-time highs of $1,850 per ounce (SeekingAlpha)

The Street reader survey: Of the almost 6,000 people who have taken The Street’s gold poll, 47 percent believe gold prices will finish between $1,500 and $1,800 an ounce in 2011 (The Street)

James Turk: The founder and chairman of online precious metals vendor GoldMoney.com sees gold sprinting much higher “probably in the first half” of this year to $2,000 per ounce (SeekingAlpha)

Charles Oliver: The senior portfolio manager of the Sprott Gold and Precious Minerals Fund, Oliver sees currencies around the world continuing to plummet in 2011. He expects that will push gold up to $1,700+ by the end of the year (SeekingAlpha)

Adrian Ash: A researcher at BullionVault sees individual savers moving into gold bullion this year as negative real interest rates erode buying power. That could push gold 20 percent higher this year to $1,695 an ounce (SeekingAlpha)

Richard O’Brien: The president and CEO of Newmont Mining Corporation (NYSE:NEM) sees gold eventually rising to $1,750 an ounce by 2012 thanks to the protection the metal provides against inflation. In 2011, he sees gold trading between $1,350 and $1,500 an ounce (Reuters)

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