3 Commodity Producers With Recent Intensive Insider Buying

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 |  Includes: CAGDF, IAG, TBTEF
by: Markus Aarnio

Since my January 26 article titled "3 Commodity Stocks With Recent Intensive Insider Buying", the stocks that I featured in the article have performed as follows:

Company Price 1/24 Price 3/1 Change
AETUF.PK $24.10 $26.06 +8.1%
FCGYF.PK $12.76 $12.97 +1.6%
SXCP $19.19 $19.90 +3.7%
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In this article, I will feature three additional commodity 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%.

1. IAMGOLD Corporation (NYSE:IAG) is a mid-tier gold producer with five operating gold mines (including current joint ventures) on three continents. In the Canadian province of Québec, the company also operates Niobec Inc., one of the world's top three producers of niobium, and owns a rare earth element resource close to its niobium mine.

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Insider buying by insider (last 30 days)

  • Robert Tait purchased 4,000 shares on February 28 and currently holds 4,000 shares or less than 0.1% of the company. Robert Tait is a senior officer at IAMGOLD.
  • Jeffery Snow purchased 59,658 shares on February 27 and currently holds 81,067 shares or less than 0.1% of the company. Jeffery Snow joined IAMGOLD in November 2009 and is currently Senior Vice President and General Counsel in addition to being member of the Executive Leadership Team.
  • Craig MacDougall purchased 1,430 shares on February 26 and currently holds 7,870 shares or less than 0.1% of the company. Craig MacDougall is Senior Vice President, Exploration.
  • Benjamin Little purchased 2,000 shares on March 1 and currently holds 4,813 shares or less than 0.1% of the company. Benjamin Little is Senior Vice President, Corporate Affairs.
  • Robert Dengler purchased 20,000 shares on February 25-26 and currently controls 47,934 shares or less than 0.1% of the company. Robert Dengler serves as a director of the company.

Insider buying by calendar month

Here is a table of IAMGOLD's insider trading activity by calendar month.

Month Insider buying / shares Insider selling / shares
March 2013 2,000 0
February 2013 85,088 0
January 2013 0 3,050
December 2012 22,907 0
November 2012 18,700 0
October 2012 0 0
September 2012 30,000 149,807
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The month of February 2013 has seen the most insider buying since September 2012.

Financials

The company reported the full year 2012 financial results on February 20 with the following highlights:

Revenue $1.7 billion
Net income $371.2 million
Cash $1.0 billion
Debt $638.8 million
Gold production 830,000 ounces
Proven & Probable gold reserves 11.3 million ounces
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Outlook

The company's outlook for 2013 is as follows:

Gold production 875,000 - 950,000 ounces
Cash costs $850-$925 per ounce
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Competition

IAMGOLD's competitors include Barrick Gold (NYSE:ABX), Newmont Mining (NYSE:NEM) and Randgold Resources (NASDAQ:GOLD). Here is a table comparing these companies.

Company IAG ABX NEM GOLD Industry Average [Gold]
Market Cap: 2.47B 29.43B 19.68B 7.50B 519.03M
Employees: N/A N/A 16,400 N/A 94.00
Qtrly Rev Growth (yoy): -0.03 0.11 -0.11 0.24 1.32
Revenue: 1.67B 14.55B 9.87B 1.33B 791.30M
Gross Margin: 0.43 0.48 0.56 0.56 0.57
EBITDA: 710.10M 6.20B 4.34B 704.62M 62.56M
Operating Margin: 0.33 -0.06 0.33 0.43 0.27
Net Income: 334.70M -665.00M 1.88B 431.80M N/A
EPS: 0.89 -0.66 3.63 4.65 0.00
P/E: 7.36 N/A 10.92 17.51 20.57
PEG (5 yr expected): -1.81 1.62 -5.12 1.50 0.94
P/S: 1.52 2.08 2.03 5.75 5.48
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IAMGOLD is trading below the industry average P/S and P/E ratios, which could explain some of the insider buying.

My analysis

There have been five different insiders buying and there have not been any insiders selling the shares during the past 30 days. There are three analyst buy ratings, five neutral ratings and one sell rating with an average target price of $15.93. The stock is trading at a P/E ratio of 7.36 and a forward P/E ratio of 6.24. The company has a book value of $9.90 per share and the stock has a 3.82% dividend yield. I believe the stock could be a good pick below the book value.

2. Centerra Gold (OTCPK:CAGDF) is a Canadian-based gold mining and exploration company engaged in the operation, exploration, development and acquisition of gold properties in Asia, the former Soviet Union and other emerging markets worldwide.

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Insider buying by insider (last 30 days)

  • Rajeev Hampole purchased 1,000 shares on February 25 and currently holds 6,273 shares or less than 0.1% of the company. Rajeev Hampole is an insider of the company.
  • Anthony Meade purchased 13,706 shares on February 20 and currently holds 16,616 shares or less than 0.1% of the company. Anthony Meade is Vice President, Human Resources and Administration.
  • Gordon Reid purchased 2,000 shares on February 25 and currently controls 8,350 shares or less than 0.1% of the company. Gordon Reid is Vice President and Chief Operating Officer.

Insider buying by calendar month

Here is a table of Centerra Gold's insider trading activity by calendar month.

Month Insider buying / shares Insider selling / shares
March 2013 0 0
February 2013 16,706 0
January 2013 0 0
December 2012 0 0
November 2012 0 0
October 2012 0 0
September 2012 2,000 0
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The month of February 2013 has seen the most insider buying since September 2012.

Financials

The company reported the full year 2012 financial results on February 20 with the following highlights:

Revenue $660.7 million
Net loss $184.0 million
Cash $382.1 million
Debt $76 million
Gold production 387,076 ounces
Proven & Probable gold reserves 11.1 million ounces
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For the full year, the company reported an adjusted net loss of $3.3 million or $0.01 per share before recognizing a one-time accounting charge of $180.7 million for the de-recognition of the underground assets at Kumtor, which results in the company recording a net loss of $184.0 million or $0.78 per share, compared to net earnings of $370.9 million or $1.57 per share in 2011.

Outlook

The company's outlook for 2013 is as follows:

Gold production 605,000 - 660,000 ounces
Operating cash cost $403 - $443 per ounce
All-in cost $1,067 - $1,164 per ounce
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My analysis

There have been three different insiders buying and there have not been any insiders selling the shares during the past 30 days. There are nine analyst buy ratings, three neutral ratings and one sell rating with an average target price of $11.98. The company has a book value of $5.95 per share. The stock could be a good pick at or below the book value.

3. Twin Butte Energy (OTCPK:TBTEF) engages in the acquisition, exploration, development, and production of petroleum and natural gas properties in Western Canada.

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Insider buying by insider (last 30 days)

  • Robert Bowman purchased 1,642 shares on February 20-28 pursuant to a purchase/ownership plan. Robert Bowman currently holds 164,968 shares or less than 0.1% of the company. Robert Bowman is Vice President, Operations.
  • John Brussa purchased 18,604 shares on February 28 pursuant to a purchase/ownership plan. John Brussa currently holds 290,240 shares or 0.1% of the company. John Brussa serves as a director of the company.
  • Neil Cathcart purchased 1,302 shares on February 28 pursuant to a purchase/ownership plan. Neil Cathcart currently holds 348,909 shares or 0.1% of the company. Neil Cathcart is Vice President, Business Development.
  • David Fitzpatrick purchased 18,604 shares on February 28 pursuant to a purchase/ownership plan. David Fitzpatrick currently holds 156,071 shares or less than 0.1% of the company. David Fitzpatrick is a Director and Chairman of Twin Butte Energy.
  • Claude Gamache purchased 1,724 shares on February 28 pursuant to a purchase/ownership plan. Claude Gamache currently holds 240,959 shares or less than 0.1% of the company. Claude Gamache is Vice President, Geosciences.
  • Thomas Greschner purchased 18,604 shares on February 28 pursuant to a purchase/ownership plan. Thomas Greschner currently holds 109,466 shares or less than 0.1% of the company. Thomas Greschner serves as a director of the company.
  • Bruce Hall purchased 1,626 shares on February 28 pursuant to a purchase/ownership plan. Bruce Hall currently holds 422,301 shares or 0.2% of the company. Bruce Hall is Chief Operating Officer.
  • Gordon Howe purchased 891 shares on February 28 pursuant to a purchase/ownership plan. Gordon Howe currently holds 1,290 shares or less than 0.1% of the company. Gordon Howe is Vice President, Land.
  • Preston Kraft purchased 1,820 shares on February 20-28 pursuant to a purchase/ownership plan. Preston Kraft currently holds 110,673 shares or less than 0.1% of the company. Preston Kraft is Vice President, Engineering.
  • James Saunders purchased 2,303 shares on February 20-28 pursuant to a purchase/ownership plan. James Saunders currently holds 4,405,968 shares or 1.8% of the company. James Saunders is the founder of Twin Butte and was the company's Chairman since its recapitalization in early 2006 to November 2008 prior to becoming the company's President and C.E.O.
  • Warren Steckley purchased 1,165 shares on February 20-28 pursuant to a purchase/ownership plan. Warren Steckley currently holds 171,108 shares or less than 0.1% of the company. Warren Steckley serves as a director of the company.
  • Alan Steele purchased 2,560 shares on February 20-28 pursuant to a purchase/ownership plan. Alan Steele currently holds 917,447 shares or 0.4% of the company. Alan Steele is Vice President, Finance & Chief Financial Officer.

Insider buying by calendar month

Here is a table of Twin Butte Energy's insider trading activity by calendar month.

Month Insider buying / shares Insider selling / shares
March 2013 0 0
February 2013 97,628 0
January 2013 9,637 752,010
December 2012 122,951 696,029
November 2012 8,142 20,000
October 2012 10,519 0
September 2012 11,175 0
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The month of February 2013 has been the second highest insider buying month.

Financials

The company reported the third-quarter financial results on November 14 with the following highlights:

Revenue $73.4 million
Net loss $7.4 million
Net debt $146.8 million
Oil production 13,752 boe/d
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Outlook

Twin Butte's strategy of moderate growth while paying a sustainable dividend has and will continue to work. With year end 2012 debt of approximately $201 million and anticipated 2013 cash flow in excess of $130 million, the company is well financed to complete its forecast 2013 capital plan of $85 million maintaining an all in payout ratio of under 100 percent. The company will continue to match its capital plan to forecast cash flow less dividends. Recent positive movement in both oil pricing and the light to heavy oil differentials, combined with the company's strong hedge position, allows Twin Butte to remain confident in the long term sustainability of the dividend and anticipates a possible expansion to its capital plan.

My analysis

The stock has a $9.13 price target from the Point and Figure chart. There have been 12 different insiders buying and there have not been any insiders selling the shares during the past 30 days. There are 12 analyst buy ratings, three neutral ratings and zero sell ratings, with an average target price of $3.14. The company is paying a monthly dividend of $0.016 per share, which gives the stock a 8.9% dividend yield. The company has a Net Asset Value of $2.98 per share. The stock could be a good pick below the Net Asset Value.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in IAG over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.