Funds bought these 3 gold stocks on the price dip

By James Dennin for Kapitall.

Gold prices fell precipitously throughout the first have of 2014 after a brief rally at the end of last year, prompting some investors to start buying the yellow metal again. 

Exchange traded products that carried gold saw more than $300 million in outflows through July, a trend which has now almost reversed—even though some analysts think gold prices will continue to fall. 

Gold is a safe-haven asset, and conflicts overseas in Ukraine and the Middle East may boost its price. If the equity market strengthens or if interest rates on bonds start to rise, however, that trend could be reversed. 

We decided to screen gold mining stocks for signs of bullishness, so we looked for signs of institutional purchasing from groups like pensions and hedge funds. 

Since these managers often have access to better information than the typical investor, it's a good place to look for standout stocks amongst less familiar names—like these small-cap gold miners that operate mostly overseas. 

We found 3 companies experiencing a spike of 5% or more in purchasing over the last quarter—a very high threshold. Do you think funds are right to buy these gold stocks? Use the list below to begin your analysis and let us know what you think in the comments. 

Click on the interactive chart to view data over time. 

 

1. Midway Gold Corp. ( MDW): Engages in the acquisition, exploration, and development of mineral properties in North America. Market cap at $147.52M, most recent closing price at $0.89.  

Net institutional purchases in the current quarter at 7.0M shares, which represents about 7.22% of the company's float of 96.89M shares. 

 

 

2. Primero Mining Corp. ( PPP): Engages in the production of precious metals in Mexico. Market cap at $1.27B, most recent closing price at $7.96.  

Net institutional purchases in the current quarter at 41.8M shares, which represents about 26.9% of the company's float of 155.38M shares. 

 

 

3. Rubicon Minerals Corporation ( RBY): Engages in the acquisition, exploration, and development of mineral properties in Canada and the United States. Market cap at $567.54M, most recent closing price at $1.52.  

Net institutional purchases in the current quarter at 40.0M shares, which represents about 12.06% of the company's float of 331.58M shares. 

 

(List compiled by James Dennin. Data sourced from Finviz.) 

Kapitall Wire is a division of New Kapitall Holdings, LLC. Kapitall Generation, LLC is a wholly owned subsidiary of New Kapitall Holdings, LLC. Kapitall Wire offers free investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by New Kapitall Holdings, LLC, and its affiliate companies.

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