Gold Rush: Hedge Funds' Favorite Gold Stocks

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(List compiled by Andrew Dominguez)

If caviar truly is worth its weight in gold, then the price for an ounce of caviar just hit an all-time high. Stoked by concerns over debt turmoil in Europe and the US, gold futures traded for a record $1,594.90 per ounce on Thursday.

"Gold is going higher on a witch’s brew of debt crisis, further stimulus, a weaker dollar and a loss of confidence in paper currencies and government," Matthew Zeman of Kingsview Financial toldBloomberg.

Gold is seen as a safe investment in times of doubt because people will always want it: It has uses as jewelry, as an electrical conductor, and it has industrial applications, among other things.

So why have gold prices skyrocketed? Prices surged during the financial crisis, and then again on news of the Greek debt saga and the sluggish economic conditions, in addition to other bouts of bad news.

More recently, Fed Chairman Ben Bernanke prompted investors to flock to gold with his statement to Congress regarding the possibility of another round of Federal Reserve monetary stimulus (QE3). 

Moreover, the most recent Italian government bond issue attracted the highest yields ever since Italy adopted the euro, a clear sign that investors are increasingly worried about the possibility of a Greek debt default compromising the financial capabilities of other Eurozone governments. 

"The climate driving gold higher is similar to that of Q2 2010 when gold also jumped to then record highs, buoyed by the emergence of the Greek sovereign crisis and U.S. quantitative easing. Gold is reacting to a similarly bullish cocktail of factors, except that as policy makers appear to have more limited options now, conditions are more gold-bullish now than in 2010," according to James Steele of HSBC (via MarketWatch).

Interested in investigating this trend? To help you start your own research, here is a list of gold mining and exploration companies with share prices that are up on the month and that have seen significant buying by hedge funds during the current quarter. Do you share the big money mangers’ bullish sentiments on these companies?

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List sorted by net shares bought by institutional investors as a percentage of the share float.

1. Extorre Gold Mines Ltd. Ordinar (XG): Market cap of $1.35B. During the current quarter, institutional investors have bought 23.1M shares (net), which represents 28.07% of the 82.28M share float. Share prices are up 35.24% since last month.

2. Keegan Resources Inc. (KGN): Market cap of $619.41M. During the current quarter, institutional investors have bought 19.1M shares (net), which represents 26.36% of the 72.47M share float. Share prices are up 6.87% since last month.

3. US Gold Corporation (UXG): Market cap of $907.36M. During the current quarter, institutional investors have bought 18.9M shares (net), which represents 17.59% of the 107.45M share float. Share prices are up 21.09% since last month.

4. Banro Corporation (BAA): Market cap of $782.94M. During the current quarter, institutional investors have bought 9.3M shares (net), which represents 5.23% of the 177.77M share float. Share prices are up 19.19% since last month.

5. Great Basin Gold Ltd. (GBG): Market cap of $996.01M. During the current quarter, institutional investors have bought 23.4M shares (net), which represents 5.17% of the 452.82M share float. Share prices are up 23.73% since last month.

6. Gold Resource Corp (GORO): Market cap of $1.34B. During the current quarter, institutional investors have bought 1.5M shares (net), which represents 4.77% of the 31.47M share float. Share prices are up 14.16% since last month.

7. International Tower Hill Mines Ltd. (THM): Market cap of $705.33M. During the current quarter, institutional investors have bought 2.9M shares (net), which represents 4.26% of the 68.09M share float. Share prices are up 19.88% since last month.

8. Compania de Minas Buenaventura SA (BVN): Market cap of $10.6B. During the current quarter, institutional investors have bought 6.1M shares (net), which represents 3.33% of the 183.36M share float. Share prices are up 4.06% since last month.

9. IAMGOLD Corp. (IAG): Market cap of $7.87B. During the current quarter, institutional investors have bought 8.6M shares (net), which represents 2.72% of the 315.65M share float. Share prices are up 6.44% since last month.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks


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