Precious Metals Forum

Go Back   Precious Metals Forum > Precious Metals and Economic News > PM Bug > Mining

Like Tree3Likes
  • 3 Post By swissaustrian

Reply
 
LinkBack Thread Tools
Old 03-31-2013, 12:06 PM   #1
Yellow Jacket
 
Join Date: Oct 2011
Posts: 2,053
Liked: 925 times
Thumbs up Insider buying of gold stocks surges to multi-year highs

Contrary to the general trend in stocks, where the insider selling is the name of the game, gold mining insiders are currently buying at record levels.

Quote :
Insider buying of gold stocks surges to multi-year highs

Darcy Keith
The Globe and Mail

Published Monday, Mar. 25 2013, 5:39 PM EDT
Last updated Monday, Mar. 25 2013, 5:39 PM EDT

The TSX global gold index has lost about a third of its value over the past two years. The S&P/TSX Venture Exchange, stock full of gold mining juniors, hit a multi-year low this month.

Yet, executives and officers who work within those businesses are showing remarkable confidence that the sector is poised for better times.

According to INK Research, there are now seven precious metals stocks on the TSX with insider buying for every one with selling. That’s a near doubling of the ratio since mid-January – and represents a level of lopsided transactions that is usually only seen during major market peaks or valleys.

That is the type of insider buying we saw in the broad market during the height of the great financial crisis in late 2008 and early 2009,” points out Ted Dixon, CEO of INK Research. “A similar situation now seems to be in place among gold and silver miners.”

Insiders are typically contrarian investors – buying shares when they perceive them to be undervalued. Right now, it appears many think the stocks are going for fire-sale prices.

They are usually early, too. Historically, insider transactions often foreshadow market moves six- to 36-months in advance.

While that may be quite a wait, it’s interesting to see insiders display this level of confidence in a sector that the broader investment community has been fleeing.

Mr. Dixon points out that while gold is well off highs near $1,900 (U.S.) an ounce in 2011, the macro backdrop hasn’t radically changed. Central banks are working hard to keep real interest rates in negative territory, and the threat that bond-buying measures will eventually lead to inflation – gold’s best friend – remains intact.

There are no shortages of forecasts calling for gold’s demise, or at least losing some of its lustre. Last week, for instance, Société Générale predicted gold would pull back to below $1,400 (U.S.) an ounce by the end of this year as the U.S. economy improves and the need for quantitative easing is scaled back.

But there are plenty of others that are more optimistic. John Hathaway, manager of the $1.8-billion Tocqueville Gold Fund, who has one of the best long-term track records in the sector, thinks gold could easily vault 25 per cent from current levels to $2,000 an ounce. The recent events in Cyprus have highlighted the continued risks to the global economy arising from the European debt crisis, and gold could continue to benefit from haven flows into hard assets.

While gold stocks have significantly underperformed the bullion market recently for various reasons, including rising production costs, Mr. Dixon thinks miners have a lot of emerging factors working in their favour.

Several CEOs have recently been fired for investing in projects that ultimately hurt shareholder value, suggesting they'll be more prudent going forward. And technicals suggest gold stocks are cheap in relation to gold; last week, the NYSE Arch Gold Bugs index, made up of U.S.-listed gold companies, hit the lowest levels versus the SPDR Gold ETF – an investment in physical metal – since the Lehman Brothers collapse.

“Such extreme situations usually do not last for long,” notes Mr. Dixon. “With both fundamental and technical conditions supporting recent heavy insider buying, it looks like a significant bottom in precious metals mining shares may be in the process of forming now.”
http://www.theglobeandmail.com/globe...ticle10312788/

Examples of gold miners with insider buying, provided by the GotGoldReport:

Quote :
GGR comment: Stocks in our universe which have seen significant insider buying since the beginning of the year include:

Channel Resources (CHU.V), http://www.canadianinsider.com/node/...ckersearch=chu

Constantine Metal Resources (CEM.V), http://www.canadianinsider.com/node/...ckersearch=cem

Guyana Goldfields (GUY.T), http://www.canadianinsider.com/node/...ckersearch=guy

Brazilian Gold (BGC.V), http://www.canadianinsider.com/node/...ckersearch=bgc

ATAC Resources (ATC.V), http://www.canadianinsider.com/node/...ckersearch=atc

Columbus Gold (CGT.V), http://www.canadianinsider.com/node/...ckersearch=cgt

Galway Gold (GLW.V), http://www.canadianinsider.com/node/...ckersearch=glw

Global Minerals (CTG.V), http://www.canadianinsider.com/node/...ckersearch=ctg

Huldra Silver (HDA.V), http://www.canadianinsider.com/node/...ckersearch=hda

Kaminak Gold (KAM.V), http://www.canadianinsider.com/node/...ckersearch=kam

Midas Gold (MAX.T), http://www.canadianinsider.com/node/...ckersearch=max

Precipitate Gold (PRG.V), http://www.canadianinsider.com/node/...ckersearch=prg

Semafo (SMF.T), http://www.canadianinsider.com/node/...ckersearch=smf

Disclosure: All of the companies mentioned above are Vulture Bargain Candidates of Interest or VBCIs. Members of the GGR team may hold long or (in rare cases) short positions in them at the time of publication. The editor of GGR has participated in financings for some Vulture Bargain and VBCI companies.
http://www.gotgoldreport.com/2013/03...ear-highs.html
PMBug, rblong2us and bushi like this.
swissaustrian is offline   Reply With Quote
Reply

Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On


Similar Threads
Thread Thread Starter Forum Replies Last Post
PM royalty stocks: Royal Gold (RGLD) + Franco Nevada (FNV) swissaustrian Mining 1 12-21-2012 09:54 PM
I am officially a multi-trillionaire!!! ADK STS 9 08-18-2012 06:38 PM
Gold, Stocks and Euro All Down after China Manufacturing News Renewed Investor Gold Bug 3 04-23-2012 02:51 PM
Did GLD And Other Gold ETFs Kill Gold Stocks? PMBug Mining 12 01-10-2012 01:15 PM
Market talk that BIS, BoE and the Fed were selling gold off earlier highs - Unconfirmed swissaustrian Gold Bug 28 12-14-2011 06:30 AM


All times are GMT -5. The time now is 03:46 AM.


Powered by vBulletin® from Jelsoft Enterprises Ltd.
Content Relevant URLs by vBSEO 3.6.0 PL2 ©2011, Crawlability, Inc.
Content of PMBug.com copyright © 2011 - 2019 Measuring Up. All Rights Reserved.