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Since my November 26, 2012 article, dealing with five resource stocks, the stocks that I featured in the article have performed as follows:

CompanyPrice 11/23Price 1/22Change
CQP$21.13$24.16+14.3%
MPO$6.26$7.20+15.0%
SXL$50.58$57.23+13.1%
MWE$50.84$54.68+7.6%
BAS$10.15$12.51+23.3%

In this article I will feature three resource stocks that have seen intensive insider buying during the last 30 days.

Intensive insider buying can be defined by the following three criteria:

  1. The stock is purchased by three or more insiders within one month.
  2. The stock is sold by no insiders in the month of intensive purchasing.
  3. At least two purchasers increase their holdings by more than 10 percent.

1. Alamos (AGIGF.PK) is an established Canadian-based gold producer that owns and operates the Mulatos Mine in Mexico, and has exploration and development activities in Mexico and Turkey. The company employs over 600 people in Mexico and Turkey and is committed to the highest standards of environmental management, social responsibility, and health and safety for its employees and neighbouring communities. Alamos has approximately $350 million cash on hand, is debt-free, and unhedged to the price of gold. As of December 31, 2012, Alamos had 120,871,408 common shares outstanding (125,531,708 shares fully diluted), which are traded on the Toronto Stock Exchange under the symbol AGI.

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Insider buying

  • Christine Barwell purchased 1,000 shares on January 18, and currently holds 1,000 shares or less than 0.1% of the company. Christine Barwell is Vice President of Human Resources.
  • Gregory Fisher purchased 1,000 shares on January 16, and currently holds 1,000 shares or less than 0.1% of the company. Gregory Fisher is the Vice President of Finance for Alamos Gold.
  • James Porter purchased 2,000 shares on January 16, and currently holds 10,000 shares or less than 0.1% of the company. James Porter is Chief Financial Officer of the company.

Financials

The company reported the third-quarter financial results on October 25, with the following highlights:

Revenue$71.3 million
Net income$25.9 million
Cash$316.9 million
Gold production43,255 ounces

News

On January 8, 2013, Alamos Gold reported record fourth-quarter and annual gold production, achieving its production guidance for the year of 200,000 ounces of gold.

Alamos sold 62,516 ounces of gold in the fourth-quarter of 2012 for record quarterly revenue of $106.9 million, a 50% increase from revenue of $71.1 million in the same period of 2011. For 2012, the company sold 197,516 ounces of gold for record annual revenue of $329.4 million, 45% higher than revenue of $227.4 million in 2011.

On January 21, 2013, Alamos Gold announced that it has mailed its formal offer and take-over bid circular and related documents with respect to Alamos' offer to acquire all of the outstanding common shares of Aurizon Mines (AZK) to Aurizon shareholders.

Outlook

The company anticipates producing between 180,000 and 200,000 ounces of gold in 2013 at a cash operating cost of $415 to $435 per ounce of gold sold, excluding a 5% royalty. If the 5% royalty is included, and assuming a $1,700 gold price, total cash costs are expected to be between $500 and $520 per ounce of gold sold.

My analysis

There have been three different insiders buying and there have not been any insiders selling the shares during the past 30 days. The stock is trading at a P/E ratio of 18.24. The company pays a semi-annual dividend of $0.10 per share. The company is targeting production from its Çannakale, Turkey mine in 2014. I have a cautiously bullish bias for the stock currently based on the intensive insider buying activity.

2. Petrominerales (OTCPK:PMGLF) engages in the exploration, development, and production of crude oil in Colombia and Peru.

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Insider buys

  • Jaime Valenzuela purchased 2,000 shares on December 31, pursuant to a purchase/ownership plan. Jaime Valenzuela currently holds 11,701 shares or less than 0.1% of the company. Jaime Valenzuela was appointed Vice President Project Management Planning, and Director of Operations in June 2011.
  • Kelly Sledz purchased 2,768 shares on December 31, pursuant to a purchase/ownership plan. Kelly Sledz currently holds 17,998 shares or less than 0.1% of the company. Kelly Sledz is Chief Financial Officer of the company.
  • John Scott purchased 2,953 shares on December 31, pursuant to a purchase/ownership plan. John Scott currently holds 28,244 shares or less than 0.1% of the company. In May 2010, Mr. Scott was appointed Chief Operating Officer of Petrominerales.
  • Tannya Morales purchased 5,324 shares on December 31, pursuant to a purchase/ownership plan. Tannya Morales currently holds 82,433 shares or 0.1% of the company. Tannya Morales was appointed Vice President, Finance in May 2010.
  • Maria Palacio purchased 1,727 shares on December 31, pursuant to a purchase/ownership plan. Maria Palacio currently holds 2,466 shares or less than 0.1% of the company. Maria Palacio joined Petrominerales in November 2010 as Director of Corporate Affairs.
  • Erik Lyngberg purchased 4,396 shares on December 31, pursuant to a purchase/ownership plan. Erik Lyngberg currently holds 15,975 shares or less than 0.1% of the company. Erik Lyngberg was appointed Petrominerales Senior Vice President, Exploration in May 2010.
  • Jeffrey Chant purchased 1,617 shares on December 31, pursuant to a purchase/ownership plan. Jeffrey Chant currently holds 2,655 shares or less than 0.1% of the company. In June 2011, Mr. Jeff Chant was appointed Vice President of Organizational Performance and Human Resources.
  • Ruben Cano purchased 2,179 shares on December 31, pursuant to a purchase/ownership plan. Ruben Cano currently holds 4,877 shares or less than 0.1% of the company. Ruben Cano has been with Petrominerales since 2007 and was appointed Vice President of Services and Logistics of Petrominerales in May 2010.
  • Corey Ruttan purchased 6,319 shares on December 31, pursuant to a purchase/ownership plan. Corey Ruttan currently holds 445,423 shares or 0.5% of the company. Corey Ruttan was appointed President and Chief Executive Officer in May 2010.

Financials

The company reported the third-quarter financial results on November 5, with the following highlights:

Revenue$251.4 million
Net income$57.5 million
Cash$33.8 million
Net debt$601 million
Oil production26,334 bopd

Outlook

The highlights of the company's 2013 capital program are:

  • Drilling up to 12 exploration wells in Llanos Basin of Colombia targeting light oil resources of up to 120 million barrels of undiscovered petroleum initially-in-place;
  • Drilling up to six appraisal and development wells at Yenac and Mantis oil fields in the Central Llanos;
  • Re-commencing development drilling program at Orito and Neiva blocks, drilling up to nine wells at Orito and up to six wells at Neiva;
  • Drilling six heavy oil wells on Colombian acreage targeting new undiscovered resource fairways and testing existing discoveries to demonstrate commerciality;
  • Acquiring 436 square kilometres of new, high-quality 3D seismic on Block 25, Mapache and Las Aguilas blocks, positioning the company to grow its multi-year prospect inventory, which currently sits at over 100 drilling locations;
  • Drilling at least two exploration wells in Brazil targeting conventional potential and the Gomo formation to start unlocking a large, unconventional oil resource on newly acquired lands; and
  • Exposure to up to two high-impact exploration prospects to be drilled by joint venture partner in Peru.

My analysis

There have been nine different insiders buying and there have not been any insiders selling the shares during the past 30 days. The stock has a 5.3% dividend yield with a quarterly dividend of $0.125 per share. The company has a book value of $12.24 per share. I believe the stock could be a good pick below the book value.

3. Epsilon Energy (OTCPK:EPSEF) is a North American on-shore focused independent oil and gas company engaged in the development, exploitation and exploration of oil and gas reserves.

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Insider buys

  • John Lovoi purchased 1,467,300 shares on December 11, 2012 - January 16, 2013 and currently controls 6,824,206 shares or 13.6% of the company.
  • Paul Atwood purchased 15,062 shares on December 28, 2012 and currently holds 88,462 shares or 0.2% of the company.
  • Zoran Arandjelovic purchased 2,000 shares on December 27, 2012 and currently holds 2,067,798 shares or 4.2% of the company. Zoran Arandjelovic co-founded Epsilon in 2005 and serves as the Executive Chairman, Chief Executive Officer and President.

Financials

The company reported the third-quarter financial results on November 8, with the following highlights:

Revenue$10.7 million
Net loss$2.2 million
Cash$8.2 million
Debt$34.1 million

News

On December 18, 2012 Epsilon announced that proved reserves as of October 31, 2012 increased to 150 Bcfe, more than double the proved reserve estimate of 72 Bcfe as of December 31, 2011.

My analysis

The stock has a $8.75 price target from the Point and Figure chart. There have been three different insiders buying and there have not been any insiders selling the shares during the past 30 days. The insiders control 30% of the company. I have a cautiously bullish bias for the stock currently based on the recent news and intensive insider buying.

Source: 3 Resource Stocks With Recent Intensive Insider Buying