GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

All Over for Gold? Canadian Insiders Don't Think So

Monica Wolfe

Monica Wolfe

122 followers
While investors seem to have lost hope in gold, Canadian insiders are taking full advantage of the dwindling share prices of their companies. The current price of gold is sitting around $1,566 (U.S. dollars) per ounce, a multi-year low, and in result many investors are saying goodbye to their gold stocks. This has proven to be quite the opposite for insiders in the gold mining and distributing industries. The TSX has shown that the gold market currently has the highest amount of insiders buying. Insiders have typically been proven to be contrarian investors, meaning they buy shares when they perceive them to be undervalued. If this is the case then it appears that quite a few insiders think that their stocks are quite undervalued.

It is also typical for insiders to be early on their transactions. History has shown that insider transactions often foreshadow market changes anywhere from six months to three years ahead of time.

There have been quite a few conflicting emotions on the future of gold. Last week, the Société Géneralé estimated that the price of gold would retreat to below $1,400 (U.S. dollars) an ounce by the end of the year. They claim that the need for gold would decrease as the US economy bounces back. On the other hand John Hathaway, manager of the Tocqueville Gold Fund, thinks that gold could increase an additional 25% to hit $2,000 per ounce. Hathaway’s beliefs are attributed to the recent events in Cyprus highlighting what damage the European debt crisis could do to the global economy.

History seems to imply that it is time for gold prices to go down. The Business Standard reports that the current bull run of gold has been the longest in terms of time frame and has brought the best returns during the last five decades. This current run started in March 2001 and peaked in August 2011 when gold sold for $1,826 an ounce. As the prices for gold are nearing a three-year low, so are the prices of gold stocks.



The following gold companies are some of Canada’s largest mid-tier, gold-producing companies. For a complete list of Canadian insider trades in the gold industry, click here.

1. Franco-Nevada Corporation (TSX:FNV)

The Franco-Nevada reported its first significant insider transaction in March. Chief Operating Officer Geoffrey Waterman bought 12,000 shares of the company stock. The shares traded at $45.51 per share for a total transaction amount of $546,074.



In contrast to most of the other mid-tier, gold-producing corporations out of Canada, Franco-Nevada’s share prices are nearing a three-year high.

Franco-Nevada Corporation is a leading gold royalty and stream company by both gold revenues and gold assets. The company maintains producing assets in North America, Africa and Europe. Franco-Nevada currently has no debt.

With its shares up 1.94%, Franco-Nevada trades at $44.08.

2. Osisko Mining (TSX:OSK)

In March Osisko Mining reported five insider buys coming from three different insiders.

- On March 14, Director William MacKinnon made two different buys adding a total of 15,000 shares at an average share price of $6.20. The transaction cost him $93,059.

- On March 8, Vice President of Corporate Development John Burzynski bought 10,000 shares at $5.96 per share. This transaction cost him $59,600.

- On March 1, Marcel Cote made two separate buys adding a total of 6,000 shares to his stake. Cote spent $35,700 on this transaction.



Osisko Mining is a mid-tier gold production company based out of Montreal, Quebec. The company is primarily focused on acquiring, exploring, developing and mining gold properties in Canada.

Osisko Mining’s price is currently sitting at a three-year low.

With its shares up 3.52%, Osisko Mining trades at $5.59.

3. IAMGOLD (TSX:IMG)

In March, IAMGOLD reported 10 insider buys coming from five different insiders.

On March 1, Executive Vice President of Corporate Affairs Benjamin Little made four separate transactions. Little bought 3,800 shares at an average cost of $6.65 per share. This transaction cost him $27,836.

On March 5, Executive Vice President and CFO Carol Banducci made two different buys for a total of 70,000 shares of IMG. The shares traded for an average price of $6.40. The transaction cost her $499,200.

On March 7, Oumar Toguyeni bought 3,208 shares at $6.43 per share. Toguyeni spent $20,627 on this transaction.

On March 13, Senior Vice President and General Counsel Jeffery Snow bought 15,100 shares at $6.86 per share. The transaction amount was $103,586.

On March 15, Director Stephen J.J. Letwin made two separate buys for a total of 45,000 shares. The average cost per share was $6.92. His total transaction amount was $103,586.



IAMGOLD’s price is currently at a 3-year low.

IAMGOLD is a mid-tier gold producer with six operating gold mines. The company produces approximately one million ounces of gold per year.

With its shares up 3.05%, IAMGOLD trades at $6.75.

4. AuRico Gold (TSX:AUQ)

AuRico Gold reported four insider transactions for March: two buys and two sells.

On March 27, Executive Vice President and CFO Robert Chausse added 15,000 shares for $6.25 per share. This transaction cost him $93,750.

On March 28, Director Richard Colterjohn made three curious transactions. Colterjohn bought 60,000 shares at $6.36 per share and then he sold all 60,000 shares for an average price of $6.351. Colterjohn lost $500 in these transactions. To view Colterjohn’s market overview, click here.

In February, AuRico Gold reported 20 insider buys and 7 insider sells.



AuRico Gold is a gold producer with two producing mines as well as two exploration sites. The company’s operations are based in Canada and Mexico. AuRico Gold’s headquarters are in Toronto, Ontario.

AuRico Gold is nearing a three-year low price of $5.82.

With its shares up 6.28%, AuRico Gold trades at $6.26.

5. Centerra Gold (TSX:CG)

Centerra Gold reported 11 insider transactions for the month of March. There were 10 insider buys and only 1 insider sell. These transactions came from four different insiders.

- President and CEO Ian Atkinson made five different transactions in March adding a total of 11,000 shares at an average price of $6.26 per share. His total transaction amount was $68,976.

- Executive Vice President and CFO Jeffrey Parr made four separate transactions, adding 7,600 shares to his stake. The shares traded at an average cost of $6.55 for a total transaction amount for the month of $49,755.

- Senior Vice President and COO Gordon Reid bought 3,000 shares at $6.32 for a total amount of $18.960.

- Director John Kazakoff sold 2,000 shares at $6.145 per share. Kazakoff brought in $12,290.



Centerra Gold is a gold mining and exploration company with operation, exploration, development and acquisition of gold properties in Asia, Russia and Canada.

With its shares up 4.18%, Centerra trades at $5.73.

6. Banro Corporation (TSX:BAA)

Banro Corp reported one insider making buys into the company in March. Executive Vice President and Director Arnold Kondrat made 15 different transactions on March 7.

Kondrat made 15 different transactions, adding 170,000 shares to his stake. These shares traded at an average cost of $1.91. Kondrat’s total transaction amount was $332,836.

These insider buys mark the first insider transactions for the company.



Banro Corp’s share prices are sitting at a three-year low.

Banro Corporation is a Canadian gold company based out of Toronto, Ontario, its production sites are in Twangiza which is located in the Democratic Republic of Congo.

With its shares up 3.87%, Banro trades at $1.61.

7. Novagold Resources (TSX:NG)

Novagold Resources reported four insider transactions for March. There were three buys coming from David Deisley and one sell coming from Melanie Hennessey.

- On March 1, Executive Vice President and General Counsel David Deisley made two separate transactions adding 1,500 shares at an average price of $3.9475. The transaction cost Deisley $5,921.

- On March 7, Deisley added an addition 7,293 shares at $3.91 per share. These additional shares cost him $28,516.

- On March 12, Vice President of Corporate Communications Melanie Hennessey sold 8,645 shares of company stock at $4.04 per share. Hennessey raked in $34,926 on this transaction. She still holds 24,876 shares in the company.



Novagold is a Canadian-based gold mining corporation. Novagold’s property is the Donlin Mine in Alaska. Novagold claims that Donlin Gold is one of the world’s largest and richest known undeveloped gold deposits. The estimated life of the mine is 27 years.

Seth Klarman has a lot of faith in the mining company. As of February 2013, Klarman holds 21,688,300 shares of Novagold.

With its shares up 3.61%, Novagold trades at $3.44.

8. Goldcorp (TSX:G)

Goldcorp is the only gold producing company going against the insider buying trend.

In March, Goldcorp reported 14 insider sells coming from 14 different corporate executives. The executives sold a total of 23,892 shares at an average price of $33.18.

In February, 16 corporate executives sold Goldcorp shares and only 1 executive added shares to his stake.



Goldcorp is the lowest-cost senior gold producer in the Americas. Goldcorp maintains operations and development projects in Mexico, the Northern US and Canada.

Goldcorp’s price is currently sitting at a three-year low.

The Signature Select Canadian Fund holds 614,600 shares in Goldcorp.

With its shares up 0.98%, Goldcorp trades at $31.95.

Note: These are not the only gold producing companies in Canada. To view more insider trades for the gold and other industries, click here.
  • CEO Buys, CFO Buys: Stocks that are bought by their CEO/CFOs.
  • Insider Cluster Buys: Stocks that multiple company officers and directors have bought.
  • Double Buys:: Companies that both Gurus and Insiders are buying
  • Triple Buys: Companies that both Gurus and Insiders are buying, and Company is buying back.

» Take a Free Trial of Premium Membership


Rating: 2.9/5 (9 votes)

Comments

LivieOliver
LivieOliver - 1 year ago
Hi,

Any thoughts on why Goldcorp has so many sellers as opposed to the others? As one of the lowest cost producers, a pretty decent political risk profile, and one of the most attractive valuations of the bunch, I cant see why insiders are selling. Classic case of "what do they know that I dont"?

Best!

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK