Timmins Gold: 4 Different Insiders Have Purchased Shares Since November 7

Dec. 4.13 | About: Timmins Gold (TGD)

Editors' Note: This article covers one or more micro-cap stocks. Please be aware of the risks associated with these stocks.

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 increased their holdings by more than 10%.

Timmins Gold (NYSEMKT:TGD) engages in the acquisition, exploration, development, and operation of mineral resource properties in Mexico.

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Insider buying during the last 30 days

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

Name Title Trade Date Shares Purchased Current Ownership Increase In Shares
Arturo Bonillas President Nov 7-22 134,400 2,619,200 shares +5.4%
Leslie Kapusianyk Senior Officer Nov 7 2,500 34,000 shares +7.9%
Darren Prins CFO Nov 7 3,500 3,500 shares from 0 to 3,500
Jose Vizquerra Director Nov 29 4,000 4,000 shares from 0 to 4,000
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There have been 144,400 shares purchased by insiders during the last 30 days.

Insider buying by calendar month

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

Month Insider buying / shares Insider selling / shares
November 2013 144,400 0
October 2013 0 0
September 2013 0 0
August 2013 0 100,000
July 2013 0 0
June 2013 0 20,000
May 2013 0 30,000
April 2013 0 0
March 2013 0 0
February 2013 0 0
January 2013 0 0
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There have been 144,400 shares purchased and there have been 150,000 shares sold by insiders this year. The month of November has seen all of the insider buying.

Financials

Timmins Gold reported the third-quarter financial results on October 29 with the following highlights:

Revenue $38.1 million
Net income $4.8 million
Cash $14.4 million
Debt $22.6 million
Gold production 29,139 ounces
Cash cost $738 per ounce
All-in sustaining cash cost $898 per ounce
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Outlook

Timmins Gold's immediate growth strategy is to produce 118,000 ounces (previously 125,000 - 130,000) during 2013 and to achieve 2013 cash cost guidance of $700 - $750 per ounce.

Competition

Timmins Gold's competitors include Brigus Gold (BRD), and Lake Shore Gold (NYSEMKT:LSG). Here is a table comparing these companies.

Company TGD BRD LSG
Market Cap: 148.48M 136.24M 155.52M
Employees: N/A 400 535
Qtrly Rev Growth (yoy): -0.09 0.22 0.31
Revenue: 159.67M 144.37M 163.89M
Gross Margin: 0.48 0.53 N/A
EBITDA: 57.83M 74.94M 53.18M
Operating Margin: 0.29 0.26 N/A
Net Income: 30.63M 12.91M -238.68M
EPS:

0.21

0.06 -0.76
P/E: 4.90 10.54 N/A
P/S: 0.93 0.95 0.92
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Timmins Gold has the second-lowest P/S ratio among these three companies.

Here is a table of these competitors' insider-trading activities this year.

Company Insider buying / shares Insider selling / shares
BRD 703,991 0
LSG 0 0
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Only Timmins Gold has seen intensive insider buying during the last 30 days.

Conclusion

There have been four different insiders buying Timmins Gold and there have not been any insiders selling Timmins Gold during the last 30 days. Two of these four insiders increased their holdings by more than 10%. Timmins Gold has an insider ownership of 4%.

There are six analyst buy ratings, zero neutral ratings, and zero sell ratings with an average price target of $2.72. Timmins Gold's San Francisco Gold Mine has a pre-tax Net Present Value at a 5% discount rate of $381 million at a constant gold price of $1,350/oz.

Timmins Gold is trading at a P/E ratio of 4.90 and a forward P/E ratio of 7.71. The company has a book value of $1.17 per share. I believe the stock could be a good pick below the book value based on the intensive insider buying.

Disclosure: I am long BRD, LSG. 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.