In this article, we will take a detailed look at the 10 Mining Stocks with Heavy Insider Buying in 2024. For a quick overview of such stocks, read our article 5 Mining Stocks with Heavy Insider Buying in 2024.
Following the Federal Reserve’s latest indication that it’s still targeting three rate cuts this year, more and more analysts are joining the bullish chorus on the Wall Street amid increasing expectations of a soft landing. HSBC was the latest to join the optimists, as it raised its year-end target for the S&P 500 to 5,400. HSBC’s bull case sets the target for the S&P at 5,700, while the bear case target is 5400. HSBC analysts, however, expect the second half of 2024 to be tougher amid election-related risks and high earnings expectations.
But for some the rally has gone too far and needs a breather. JPMorgan, which is bullish on the broader stock market, said in its fresh note that companies would need to post high earnings growth this year to justify their earnings multiples that have swelled a whopping 30% since their October 2022 lows. JPMorgan analysts said that if the Fed goes with dovish policy and earnings continue to expand, the current multiples could be “defended.” However, in case the central bank takes a “reactive” stance and earnings disappoint, multiples would have to fall.
What’s the Future of Mining Stocks?
Mining stocks have been in the spotlight as investors await rate cuts which are expected to bring a much-needed relief in the commodities industry. Goldman Sachs analysts recently said that commodities will gain this year on the back of rate cuts as they expect manufacturing activity to rebound following an ease in monetary policy. While Goldman Sachs said gains are expected for copper, aluminum, gold and oil, they cautioned investors to be selective as they don’t expect across-the-board gains. Some other analysts have also shared their optimism about the commodities and mining sector. Macquarie Group earlier this year said that commodities were entering a new cyclical boom because of low supplies and a rebound in global economic activity.
Photo by Ricardo Gomez Angel on Unsplash
In this backdrop we decided to see which mining stocks corporate insiders are piling into. For that we first used Insider Monkey’s insider trading stock screener to list down all mining stocks that saw insider buying activity over the past few weeks. From these stocks we chose ten stocks with the highest insider purchases in terms of dollar value. Some top names in the list include Arch Resources Inc (NYSE:ARCH), Cleveland-Cliffs Inc (NYSE:CLF) and Warrior Met Coal, Inc (NYSE:HCC). But why is it important to keep tabs on hedge fund and insider activity? Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).
10. Thunder Mountain Gold Inc (OTC:THMG)
Number of Hedge Fund Investors: N/A
Thunder Mountain Gold Inc (OTC:THMG) explores for gold, silver, base metals, and other commodities in Idaho and Nevada. Thunder Mountain Gold Inc’s (OTC:THMG) CEO and President Eric T. Jones on February 5 bought 10,000 shares of Thunder Mountain Gold Inc (OTC:THMG) at $0.04 per share. The penny stock is up by about 2.5% since then.
9. Dakota Gold Corp (NYSE:DC)
Number of Hedge Fund Investors: 2
South Dakota-based Dakota Gold Corp (NYSE:DC) is one of the important gold mining companies seeing insider buying in 2024. On February 5, 2024, Robert Quartermain, a director at Dakota Gold Corp’s (NYSE:DC) board, snapped up 20,000 shares of Dakota Gold Corp (NYSE:DC) at $2.05 apiece. The stock price has jumped about 13% since then.
In addition to DC, Arch Resources Inc (NYSE:ARCH), Cleveland-Cliffs Inc (NYSE:CLF) and Warrior Met Coal, Inc (NYSE:HCC) are also seeing insider buying activity.
8. PHX Minerals Inc (NYSE:PHX)
Number of Hedge Fund Investors: 3
Texas-based natural gas and oil mineral company PHX Minerals Inc (NYSE:PHX) is one of the top mining stocks seeing insider buying activity this year. On March 14, PHX Minerals Inc’s (NYSE:PHX) CFO Ralph D’Amico bought 3500 shares of PHX Minerals Inc (NYSE:PHX) at $3.04 per share. The stock is up about 3.9% since then through March 26.
Earlier this month PHX Minerals Inc (NYSE:PHX) posted Q4 results. GAAP EPS in the period came in at $0.07, beating estimates by $0.02. Revenue in the period came in at $11.78 million, surpassing estimates by $2.61 million.
As of the end of the fourth quarter of 2023, just three hedge funds in Insider Monkey’s database had stakes in PHX Minerals Inc (NYSE:PHX).
During an earnings call back in November 2023, PHX management talked about key financial performance metrics:
“Adjusted EBITDA was $6.3 million in our quarter ended September 30, 2023 as compared to $4.1 million in the June 30, 2023 quarter. I’d also like to point out that our EBITDA margins are higher than they have been in at least the last five years as we continue to show success in our minerals only strategy and we expect margins to continue to expand as we scale up the business. DD&A was down 9% to $2 million compared to the prior sequential quarter. Net income for the quarter was $1.9 million or $0.05 per share compared to a net loss of $40,000 or effectively $0.00 per share for the prior sequential quarter. We had total debt of $30 million $750,000 as of September 30 compared to $23.75 million as of June 30 as we partially funded our previously announced acquisition package totaling $13.4 million in September with cash on hand and debt.
Our debt to trailing 12-month EBITDA was 1.31 times at September 30, 2023. Additionally, during our regularly scheduled borrowing base redetermination, our bank group increased our advanced rate from $45 million to $50 million.”
Read the full earnings call guidance here.
7. Vista Gold Corp. (NYSE:VGZ)
Number of Hedge Fund Investors: 4
Douglas Tobler, the CFO of Vista Gold Corp. (NYSE:VGZ), on March 21 loaded up on 3,500 shares of Vista Gold Corp. (NYSE:VGZ) at $0.48 per share. The stock price is flat since then as of date.
In addition to VGZ, insiders also like Arch Resources Inc (NYSE:ARCH), Cleveland-Cliffs Inc (NYSE:CLF) and Warrior Met Coal, Inc (NYSE:HCC).
6. Gatos Silver Inc (NYSE:GATO)
Number of Hedge Fund Investors: 10
Canadian silver mining company Gatos Silver Inc (NYSE:GATO) is one of the mining stocks with recent insider purchases. Stephen Bodley, General Counsel and Chief Compliance Officer of the company, on February 23 bought 10,000 shares of Gatos Silver Inc (NYSE:GATO) at $5.65 per share. Since then the stock has gained about 36%. In another insider transaction on February 23, Gatos Silver Inc (NYSE:GATO) CEO Dale Andres loaded up on 10,000 shares of Gatos Silver Inc (NYSE:GATO) at $5.55 per share.
Last month, during its latest earnings call, Gatos Silver talked about latest projects and their progress:
“Our geologists have been hard at work for the last couple of years getting the Southeast Deeps defined and adding to our life of mine. And now in 2024, we are excited by the chance to ramp up the exploration work, on the rest of our 103,000 hectare land package. We will still be doing a lot of work within 3 to 4 kilometers of the mine operations as it will be easiest to bring anything we find in this area close to the mine, into production in a timely manner. You can clearly see the large number of veins we already know of just within that close range. We will be getting the drill rigged out beyond this area as well, with some very perspective targets in the San Luis area, which is about 5 kilometers to the Northwest of the mine, and we have a number of targets further to the Northwest, about 22 kilometers from the mine in the [Lentz] area.
So turning to Slide 12. In summary, we continue to safely drive mill throughput increases, together with productivity improvements and cost optimization, which is a core part of our business and operating strategy. We remain focused on extending the mine life, and that’s by the third quarter of 2024, together with other value-enhancing initiatives. And we continue to be very excited as we start to increase our near mine and district drilling in the large and highly prospective Los Gatos district. And finally and importantly, we continue to generate strong operating margins and cash flow with regular distributions expected from the Los Gatos joint venture and a growing cash balance.”
Read the company’s full earnings call guidance here.
Insider Monkey’s database of 933 hedge funds shows that 10 hedge funds had stakes in Gatos Silver Inc (NYSE:GATO) as of the end of December 2023.
Click to continue reading and see 5 Mining Stocks with Heavy Insider Buying in 2024.
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Disclosure. None. 10 Mining Stocks with Heavy Insider Buying in 2024 is originally published on Insider Monkey.