Intensive Insider Buying In Agnico-Eagle Mines

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 |  About: Agnico Eagle Mines Limited (AEM)
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%.

Agnico-Eagle Mines (NYSE:AEM) engages in the exploration, development, and production of mineral properties in Canada, Finland, and Mexico.

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Insider buying during the last 30 days

Here is a table of Agnico-Eagle Mines' insider-trading activity during the last 30 days by insider.

Name Title Trade Date Shares Purchased Ownership Plan Current Ownership Increase In Shares
Don Allan SVP Sep 30 631 Yes 12,825 shares +5.2%
Alain Blackburn SVP Sep 30 631 Yes 4,361 shares +16.9%
Lino Cafazzo VP Sep 30 342 Yes 2,155 shares +18.9%
Brian Christie VP Sep 30 453 Yes 2,245 shares +25.3%
Mathew Cook VP Sep 30 274 Yes 869 shares +46.1%
Paul Cousin VP Sep 30 342 Yes 6,484 shares +5.6%
Picklu Datta SVP Sep 30 357 Yes 3,665 shares +10.8%
Patrice Gilbert VP Sep 30 441 Yes 5,525 shares +8.7%
Guy Gosselin VP Sep 30 342 Yes 6,343 shares +5.7%
Louise Grondin SVP Sep 30 480 Yes 6,571 shares +7.9%
Ingmar Haga VP Sep 30 496 Yes 8,180 shares +6.5%
Tim Haldane SVP Sep 30 579 Yes 10,768 shares +5.7%
Gregory Laing SVP Sep 30 616 Yes 13,360 shares +4.8%
Michel Leclerc VP Sep 30 370 Yes 2,443 shares +17.8%
Marc Legault SVP Sep 30 493 Yes 15,036 shares +3.4%
Luis Medina VP Sep 30 352 Yes 2,925 shares +13.7%
Jeanluk Pellerin SVP Sep 30 480 Yes 2,459 shares +24.3%
Christian Provencher VP Sep 30 370 Yes 3,232 shares +12.9%
Jean Robitaille SVP Sep 30 600 Yes 37,476 shares +1.6%
David Smith SVP Sep 30 616 Yes 13,051 shares +5.0%
Yvon Sylvestre SVP Sep 30 576 Yes 5,185 shares +12.5%
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There have been 9,841 shares purchased by insiders during the last 30 days.

Insider buying by calendar month

Here is a table of Agnico-Eagle Mines' insider-trading activity by calendar month.

Month Insider buying / shares Insider selling / shares
September 2013 12,341 0
August 2013 1,000 0
July 2013 0 0
June 2013 9,904 0
May 2013 0 0
April 2013 1,200 0
March 2013 9,864 0
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There have been 34,309 shares purchased and there have been zero shares sold by insiders since March 2013. The month of September has seen the most insider buying since March 2013.

Financials

Agnico-Eagle Mines reported the second-quarter financial results on July 24 with the following highlights:

Revenue $336.4 million
Net loss $24.4 million
Cash $136.4 million
Debt $861.0 million
Gold production 224,089 ounces
Total cash costs $785 per ounce
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Outlook

Production is expected to be stronger in the second half of 2013 due to resumption of production at Kittila, increased production at Creston Mascota, the ongoing ramp up of production from the deeper and richer levels of LaRonde, higher expected grades at Meadowbank, and the planned start of production at Goldex.

Agnico-Eagle's production guidance for 2013 is 970,000 to 1,010,000 ounces of gold. Expected total cash costs per ounce are $735 to $785. For the full year 2013, expected all-in sustaining costs are approximately $1,100 per ounce.

In 2014, Agnico-Eagle expects to have significant production growth from LaRonde (due to anticipated improvement in grades), Goldex (due to a planned full year of operations) and La India (due to the expected start of commercial production in 2014). Agnico-Eagle expects payable gold production to be in the range of 1,100,000 ounces to 1,140,000 ounces in 2014.

In 2015, further production growth is expected from LaRonde (due to higher grades) and Pinos Altos (due to anticipated mill optimization) with payable gold production expected to exceed 1,200,000 ounces.

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Competition

Agnico-Eagle Mines' competitors include Barrick Gold (NYSE:ABX), Kinross Gold (NYSE:KGC), and Newmont Mining (NYSE:NEM). Here is a table comparing these companies.

Company AEM ABX KGC NEM
Market Cap: 4.16B 18.26B 5.55B 13.30B
Employees: N/A 28,155 9,000 16,400
Qtrly Rev Growth (yoy): -0.27 -0.01 -0.04 -0.11
Revenue: 1.74B 14.30B 4.33B 9.13B
Gross Margin: 0.47 0.45 0.56 0.51
EBITDA: 627.97M 7.24B 3.15B 3.72B
Operating Margin: 0.20 0.38 0.26 0.28
Net Income: 188.57M -9.72B -5.08B -733.00M
EPS: 1.09 -10.18 -5.10 -1.34
P/E: 21.98 N/A N/A N/A
PEG (5 yr expected): -3.42 3.34 -0.81 -0.68
P/S: 2.39 1.23 1.24 1.41
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Agnico-Eagle is the only one of these companies with net profit for the trailing 12-month period.

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

Company Insider buying / shares Insider selling / shares
ABX 375,487 103,399
KGC 85,494 4,102
NEM 3,000 2,026
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Kinross Gold has also seen intensive insider buying during the past 30 days.

Conclusion

There have been 21 different insiders buying Agnico-Eagle and there have not been any insiders selling Agnico-Eagle during the last 30 days. Ten of these 21 insiders increased their holdings by more than 10%.

There are five analyst buy ratings, 14 neutral ratings and two sell ratings with an average price target of $32.52. The stock is trading at a P/E ratio of 21.98 and a forward P/E ratio of 37.00. Agnico-Eagle has a book value of $19.80 per share and the stock has a dividend yield of 3.66%.

Agnico-Eagle's gold reserves stand at 18.7 million ounces. Agnico-Eagle Mines also has approximately 96 million ounces of silver, 220,000 tonnes of zinc and 73,000 tonnes of copper in reserves. Over the next three years, Agnico-Eagle expects to grow its gold production by 20% to over 1,200,000 ounces.

I believe the stock could be a good pick at the current price level based on the intensive insider buying.

Disclosure: I am long NUGT. 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.