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Gold stocks tend to under-perform during election years. Over the past quarter-century up until the prior election, the performance of the Philadelphia Stock Exchange Gold and Silver Index (XAU) was weak during the year of a presidential election. The silver lining for gold stock investors is that the XAU has historically bounced back the year after the election as shown in the chart below.

(click to enlarge)Based on this observation I screened for gold mining companies with insider buying during the month of November. Here is a look at four companies that I found.

1. Banro (NYSEMKT:BAA) is a Canadian gold company with production from its first gold project, Twangiza, which is located in the Democratic Republic of the Congo. Banro is also focused on the development of its second open pit project Namoya and is undertaking exploration on two further fully permitted and licensed projects, Kamituga and Lugushwa. All Banro's current projects lie along the 210 km long Twangiza-Namoya gold belt in the South Kivu and Maniema provinces of the DRC. Banro has identified 6.74 million ounces of Measured and Indicated Resources, plus Inferred Resources of 4.59 million ounces along this highly-prospective gold belt.

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Insider buys

  • Simon Village purchased 100,000 shares on November 22. Simon Village is the CEO and President of the company.
  • Arnold Kondrat purchased 50,000 shares on November 22. Arnold Kondrat is Banro's principal founder and Executive Vice-President of the corporation.

Financials

The company reported the third-quarter financial results on November 15 with the following highlights:

Revenue$8.7 million
Net loss$2.8 million
Cash$63.4 million
Debt$153.4 million

Upcoming milestones

The company gave a corporate update and outlook for 2013 on November 21 with the following highlights:

  • Twangiza's expansion is underway, targeting production in the order of 10,000 ounces per month by Q4 2013, with a steady increase in production since the mill disruptions in September, and production now approaching 8,000 ounces per month with lower unit costs.
  • Namoya's development is on track for commissioning in mid-2013 with the project at peak activity and capital expenditures.

My analysis

The stock made a new multi-month low last week. There have been two insider buy transactions and there have not been any insider sell transactions since October 1. There are 0 analyst buy ratings, one neutral rating and 0 sell ratings for the stock currently. The stock is trading at a forward P/E ratio of 21.47. The company's target is to achieve annual gold production of more than 400,000 ounces from the Twangiza-Namoya gold belt oxide sources by 2017. I have a bullish bias for the stock based on the solid fundamentals.

2. Alacer Gold Corp. (OTCPK:ALIAF) is an intermediate gold producer with a portfolio of long-life mines providing ore to three processing facilities in Turkey and Australia. Alacer's operations produced a total of 421,204 ounces of gold during 2011 and the company's gold production outlook for calendar 2012 is 385,000 to 403,000 attributable ounces. At December 31, 2011, Alacer's attributable Mineral Resources were 13.8 million ounces of gold and Ore Reserves were 5.3 million ounces of gold.

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Insider buys

Vladimir Iorich purchased 1,075,800 shares on November 15-21. Vladimir Iorich's net wort was $1.6 billion as of March 2012.

Financials

The company reported the third-quarter financial results with the following highlights:

Revenue$179.5 million
Net income$32.0 million
Cash$280.0 million
Debt$55.2 million
Gold production90,951 ounces

Outlook

The company's guidance for the full-year 2012 is as follows:

Gold production385,000 - 403,000 ounces
Cash operating costs / ounce$649-$675
Total cash costs / ounce$755-$781

Competition

Alacer Gold's competitors include Eldorado Gold (NYSE:EGO), Inmet Mining (OTC:IEMMF) and Newmont Mining (NYSE:NEM). Here is a table comparing these companies.

CompanyALIAFEGOIEMMFNEM
Market Cap:1.36B11.00B3.75B23.67B
Employees:N/AN/AN/A17,100
Qtrly Rev Growth (yoy):-0.03-0.140.29-0.10
Revenue:721.17M1.10B1.14B10.16B
Gross Margin:0.570.650.580.58
EBITDA:322.98M583.34M577.42M4.60B
Operating Margin:0.250.430.390.35
Net Income:174.18M279.17M363.05M212.00M
EPS:0.620.435.270.22
P/E:7.6935.8810.26219.77
PEG (5 yr expected):N/A3.02N/A-3.64
P/S:1.929.853.282.30

Alacer Gold is trading below the industry average P/E ratio.

My analysis

The stock is currently trading at 52 -week lows. There have been four insider buy transactions and there have not been any insider sell transactions since September 19. The stock is trading at a P/E ratio of 7.69. I have a bullish bias for the stock based on the solid fundamentals.

3. Semafo (OTCPK:SEMFF) is a Canadian-based mining company with gold production and exploration activities in West Africa. The corporation currently operates three gold mines: the Mana Mine in Burkina Faso, the Samira Hill Mine in Niger and the Kiniero Mine in Guinea.

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Insider buys

  • Benoit Desormeaux purchased 10,000 shares on November 23. Benoit Desormeaux is the President & Chief Executive Officer of the company.
  • Lawrence McBrearty purchased 9,130 shares on July 17. Lawrence McBrearty serves as a director of the company.
  • John LeBoutillier purchased 10,000 shares on July 16. John LeBoutillier serves as a director of the company.
  • Michel Crevier purchased 10,000 shares on July 16. Michel Crevier is Vice-President of the company.
  • Benoit La Salle purchased 25,000 shares on July 13. Benoit La Salle serves as a director of the company.
  • Terence Bowles purchased 6,000 shares on July 13. Terence Bowles serves as a director of the company.
  • Alain Mélanson purchased 3,775 shares on July 13. Alain Mélanson is Vice-President, Human Resources.

Financials

The company reported the third-quarter financial results with the following highlights:

Revenue$79.4 million
Net income$8.0 million
Cash$154.5 million
Gold production52,300 ounces

Outlook

The company's full-year 2012 production guidance is between 235,000 and 260,000 ounces of gold at a cash operating cost of $700 to $750 per ounce.

My analysis

The stock has met its bearish $3.5 price target from the Point and Figure chart. There have been eight insider buy transactions and there have not been any insider sell transactions during the last 6 months. The stock is trading at a P/E ratio of 18.25. The company's mineral reserves [2P] and mineral resources [M&I] are 7.3 million ounces. I have a cautiously bullish bias for the stock based on the fundamental and technical picture.

4. Esperanza (OTC:ESPZF) is a precious metals exploration and development company focused on advancing its principal property, the wholly-owned Cerro Jumil gold project in Morelos State, Mexico.

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Insider buys

  • Daniel O'Flaherty purchased 5,600 shares on November 15, 36,000 warrants on September 14-20, 20,000 shares on September 14 and 25,000 shares on July 11. Daniel O'Flaherty is Executive Vice President of the company.
  • Gregory Smith purchased 10,000 shares on September 12 and 14,000 shares on August 9. Gregory Smith is the President & CEO of the company.
  • William Pincus purchased 10,000 warrants on June 25 and 20,000 shares on June 25. William Pincus is the Chairman of the Board.

Financials

The company reported the third-quarter financial results on November 21 with the following highlights:

Revenue$0
Net loss$6.5 million
Cash$39.3 million

News

The company reported an updated resource at Cerro Jumil on September 11 with the following highlights:

  • Measured and indicated [M&I] gold resources of 1.47 million ounces, an increase of 61% from the September 2010 resource.
  • M&I gold grade of 0.91 grams per tonne [gpt], an increase of 10% from the September 2010 resource.

My analysis

The stock has met its bearish $1.5 price target from the Point and Figure chart. There have been 12 insider buy transactions and there have not been any insider sell transactions during the last 6 months. The next catalyst for the stock will be the Feasibility Study results for the Cerro Jumil project due in 2013. The 200 day moving average is currently at $1.36 which could be a good entry point for the stock.

Source: 4 Gold Miners With Recent Insider Buying