Insiders Are Buying AuRico Gold

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 |  About: AuRico Gold (AUQ)
by: Markus Aarnio

In this article, I will feature one gold miner that has 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%.

AuRico Gold (NYSE:AUQ) operates as a gold producer with mines and projects in North America.

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Insider buying during the last 30 days

Here is a table of AuRico Gold's insider-trading activity during the last 30 days by insider.

Name Title Trade Date Shares Purchased Purchase Plan Current Ownership Increase In Shares
Christopher Bostwick SVP Oct 9 3,399 Yes 35,625 shares +10.5%
Robert Chausse CFO Sep 30-Oct 9 29,266 Yes and No 47,745 shares +158.4%
Luis Chavez Director Oct 9 2,785 Yes 57,127 shares +5.1%
Richard Colterjohn Director Oct 9 976 Yes 251,874 shares +0.4%
Mark Daniel Director Oct 9 1,031 Yes 11,682 shares +9.7%
Anne Day VP Oct 9 2,290 Yes 17,705 shares +14.9%
Patrick Downey Director Oct 9 868 Yes 14,356 shares +6.4%
Alan Edwards Director Oct 9 1,751 Yes 33,503 shares +5.5%
Peter MacPhail EVP Oct 9 4,266 Yes 47,487 shares +9.9%
Trent Mell EVP Oct 9 4,266 Yes 38,800 shares +12.4%
Charlene Milner SVP Oct 9 2,571 Yes 12,214 shares +26.7%
Chris Richter SVP Oct 9 2,629 Yes 28,964 shares +10.0%
Chris Rockingham VP Oct 9 3,015 Yes 44,251 shares +7.3%
Ronald Smith Director Oct 9 1,031 Yes 9,139 shares +12.7%
Joseph Spiteri Director Oct 9 907 Yes 12,083 shares +8.1%
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There have been 61,051 shares purchased by insiders during the last 30 days. Robert Chausse purchased 4,266 shares pursuant to a purchase/ownership plan and he purchased 25,000 shares without the ownership plan.

Insider buying by calendar month

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

Month Insider buying / shares Insider selling / shares
October 2013 36,051 0
September 2013 25,000 0
August 2013 197 0
July 2013 28,936 0
June 2013 0 0
May 2013 20,000 0
April 2013 25,991 0
March 2013 15,000 0
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There have been 151,175 shares purchased and there have been zero shares sold by insiders since March 2013.

Financials

AuRico Gold reported the second-quarter financial results on August 8 with the following highlights:

Revenue $57.7 million
Adjusted net earnings $6.1 million
Net loss $103.5 million
Cash $209.7 million
Debt $188.2 million
Gold production 48,003 ounces
Cash costs $655 per ounce
All-in cash costs $1,189 per ounce
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Due to the lower metal price environment currently being experienced, AuRico's second quarter net earnings were adjusted by $104.9 million, net of taxes, for non-cash impairments and revaluations.

Outlook

AuRico's guidance for full-year 2013 is as follows:

Gold production (ounces) 190,000-220,000
Cash costs per ounce $565-$645
All-in cash costs per ounce $1,100-$1,200
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Competition

Other gold miners that have seen intensive insider buying during the past four months include St. Andrew Goldfields (OTCQX:STADF), Continental Gold (OTCQX:CGOOF), Kinross (NYSE:KGC) and Agnico-Eagle Mines (NYSE:AEM).

Here is a table of these competitors' insider-trading activities during the past six months.

Company Insider buying / shares Insider selling / shares
STADF 168,745 0
CGOOF 54,400 819,853
KGC 85,494 14,554
AEM 14,604 0
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St. Andrew Goldfields has also seen intensive insider buying during the last 30 days.

Conclusion

There have been 15 different insiders buying AuRico and there have not been any insiders selling AuRico during the last 30 days. Seven of these 15 insiders increased their holdings by more than 10%.

There are three analyst buy ratings, seven neutral ratings and one sell rating with an average target price of $5.54. AuRico's proven and probable gold reserves are 6.8 million ounces.

The stock is trading at a forward P/E ratio of 24.40 and the company has a book value of $7.69 per share. AuRico pays a quarterly dividend of $0.04 per share. I believe the stock could be a good pick below the book value of $7.69 per share.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in AUQ, OTCQX:STADF 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.