Gold Stocks: Hedge Funds Love This List of Gold Mining Stocks

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(List compiled by Andrew Dominguez. Data sourced from Finviz and Fidelity.)

Gold prices hit $1,718 per ounce in Asian trading late Monday on fears regarding the US stock markets and European debt. This was a record high. It also represents a 4.2 percent increase from its Friday close in New York. Gold is up 21 percent year to date (via the Los Angeles Times).

Gold is considered a safe investment because investors believe that it will always retain its value – it has been a much sought-after commodity for thousands of years and supply is limited. In times of crisis, when investors are most worried that equities, bonds, and currencies could lose value, demand for gold typically soars, usually accompanied by increased demand for other safe-haven investments like US Treasuries in a market phenomenon commonly referred to as a “flight to safety”.

This year, the flight to safety has included increased demand for the Swiss Franc and silver, in addition to gold and US Treasuries (despite the downgrade).

Gold and silver prices have also been buoyed by the weak dollar. The precious metals (and oil) are priced in US dollars in markets around the world. Because the dollar has depreciated relative to other currencies, foreign investors are able to purchase more dollars for each unit of their currency, which in turn puts upward pressure on the price of dollar-denominated goods and commodities, like gold.

And, because global investors are (rightfully) worried about worsening economic and market conditions in the US, Europe, and China, we could be witnessing a global flight to safety.

Inflated gold prices could reward gold miners around the world. Here is a list of gold companies that hedge funds have been snapping up. Do you agree with the optimistic sentiment regarding these stocks?

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

1. Keegan Resources Inc. (KGN): Market cap of $579.81M. During the current quarter, institutional investors have bought 13.4M shares (net), which represents 18.49% of the 72.47M share float.

2. Banro Corporation (BAA): Market cap of $731.38M. During the current quarter, institutional investors have bought 18.7M shares (net), which represents 10.52% of the 177.77M share float.

3. Gold Resource Corp (GORO): Market cap of $1.29B. During the current quarter, institutional investors have bought 2.8M shares (net), which represents 8.77% of the 31.91M share float.

4. Allied Nevada Gold Corp. (ANV): Market cap of $3.14B. During the current quarter, institutional investors have bought 3.7M shares (net), which represents 4.56% of the 81.20M share float.

5. Compania de Minas Buenaventura SA (BVN): Market cap of $10.03B. During the current quarter, institutional investors have bought 6.8M shares (net), which represents 3.69% of the 184.33M share float.

6. IAMGOLD Corp. (IAG): Market cap of $7.24B. During the current quarter, institutional investors have bought 11.0M shares (net), which represents 3.48% of the 315.65M share float.

7. Extorre Gold Mines Ltd. Ordinar (XG): Market cap of $985.46M. During the current quarter, institutional investors have bought 21.3M shares (net), which represents 25.83% of the 82.45M share float.

8. US Gold Corporation (UXG): Market cap of $782.53M. During the current quarter, institutional investors have bought 18.0M shares (net), which represents 16.75% of the 107.47M share float.

9. International Tower Hill Mines Ltd. (THM): Market cap of $585.09M. During the current quarter, institutional investors have bought 1.9M shares (net), which represents 2.79% of the 68.09M share float.

10. Exeter Resource Corporation (XRA): Market cap of $355.2M. During the current quarter, institutional investors have bought 1.3M shares (net), which represents 1.66% of the 78.30M share float.



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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