The Canadian insider blog discusses news and insight found among insider and significant shareholder filings in Canada.
Ted Dixon is co-founder and CEO of INK Research. He is the creator of the INK Canadian Insider Index, and is the editor of the daily Morning INK and weekly Market INK reports. He is a regular contributor to the Globe and Mail's Globe Investor pages and has also worked as a part-time lecturer in corporate finance at the British Columbia Institute of Technology. Before starting INK, he worked at the Connor, Clark & Lunn Financial Group where his responsibilities included portfolio strategy and product development. He has also been an analyst at the Fraser Institute and a treasury specialist at the TD Bank. He holds an MBA in Financial Management from the University of Chicago, and a Bachelor of Commerce from UBC.
Canadian insider sentiment remains upbeat even as stocks rally led by oil patch names which have been outperforming mega-cap Apple (AAPL) since mid-July 2023.
Stocks tracked by the INK Canadian Insider Index are up 13.7% so far in 2024.
Now, copper producers are beating NVIDIA (NVDA) over the past 60 days.
In our weekend Globe and Mail Who is Buying and Selling feature, we looked Firan Technology Group (FTG) where insiders have spent $266,213 buying shares in the public market over the past 90 days. We most recently featured the stock for community members in the April 24, 2024 Morning INK Report.
Firan Technology Group insider chart from the April 26, 2024 INK Research morning report.
The share price of the aerospace and defence electronics supplier has been descending recently, and in the report we identify one possible reason why. Insiders are buying, however.
The Market INK Report kicked off April noting that many investors had expected 2024 to be a year dominated by AI. However, geopolitics and commodity scarcity have emerged as key forces shaping returns year-to-date. That has turned out to be good news for insiders who have been buying copper, gold, and energy names for some time.
Canadian stocks preferred by insiders have enjoyed double-digit returns so far in 2024
It pays to let the insiders guide you. Year-to-date, the INK Canadian Insider Index which tracks 50 TSX-listed stocks preferred by insiders has advanced 12.22% as of April 23rd, thanks to its 49% weighting to the Energy and Basic Materials sectors. You can read more about insider sentiment trends and stocks with insider activity in our early April Market INK Report.
In our weekend Globe and Mail Who is Buying and Selling feature, we returned to the gold mining group, this time with a peak at Guyana. At the end of March, a clip of President Irfaan Ali went viral. It featured his spirited defence of Guyana's climate and resource policies in a BBC interview with Stephen Sackur.
Guyana President Irfaan Ali on BBC Hardtalk March 29, 2024
The discussion centred around oil & gas, but the President is also an advocate of mining, according to Omai Gold Mines (OMG), a stock we featured in the April 12, 2024 Morning INK Report.
In the weekend Globe and Mail Who is Buying and Selling feature, INK highlighted Spanish Mountain Gold (SPA). In the original INK Research report published on April 10th, we recognized that smaller junior mining stocks have been lagging global producers. However, if the gold producer rally continues, we suspect that investors may start to value the reserves in the ground of junior stocks more favourably.
Spanish Mountain Gold featured in the April 12, 2024 Globe and Mail
That is one reason why Spanish Mountain Gold caught our attention.
The share price of uranium miner Cameco (T:CCO; NYSE: CCJ) has been rallying on the back of a bullish report from a US investment bank. However, as Wall Street says buy, insiders sell.
Nevertheless, as we have seen in the US technology sector over the past decade, insider selling into Wall Street hype does not necessarily foreshadow an immediate price trend reversal. Cameco stock could still move higher despite insider profit-taking. For those investors who want to outperform the Wall Street herd, there may be better opportunities than Cameco in the uranium mining space.
In a report was originally published for Canadian Insider members on March 13, 2024, we looked at three mining stocks with insider buying that were still trading below where they were a year ago.
The names were OceanaGold, Vizsla Silver and Aurion Resources. All three are up meaningfully from report date.
In the Monday market update, we highlighted the large outperformance (4.88%) in Q1 of the INK Canadian Insider Index outperformance over the S&P/TSX Composite Index. What we did not point out was the INK CIN Index pulling ahead of the S&P 500 which it did last week. You have to look a lot closer to see the gap, a tiny 0.49% in favour of the INK CIN Index as of March 28th. The INK CIN Index subsequently widened its gap a bit against the S&P 500 on the first trading day in Q2.
The INK CIN Index widened its 2024 lead versus the S&P 500 on the first day of Q2
With the move being driven by oil & gas stocks, it reminds us of 2022 when the Index outperformed most broad market benchmarks globally in the aftermath of the start of the Russia-Ukraine War.
From the April 1, 2024 Market INK Report - The INK Canadian (CIN) Insider Index which tracks 50 stocks on the TSX preferred by insiders advanced 10.65% in the first quarter of the year, outperforming the S&P/TSX Composite Index by 4.88% during the period. Since going live on November 14, 2014, the INK CIN Index is up 126.75% versus 49.99% for the TSX Composite Index on a price basis.
The INK Canadian Insider Index tracks 50 stocks listed on the TSX preferred by insiders
Despite this substantial outperformance, legacy media, without exception, ignores the INK CIN Index, preferring to play it safe by exclusively quoting the S&P/TSX Composite despite its lacklustre performance. However, the way we see it, this is a bit of a blessing for those who use insider activity and holdings in their investment decision-making.
From the March INK Top 20 Mining & Crypto Report - Gold continues to advance even as the Federal Reserve drags its feet on cutting rates. Even copper has managed to make progress, poking above US$4.00/lb. The defiance of these two major metals even as US interest rates remain high has led to some spectacular moves among some junior mining names.
Awale Resources (ARIC) debuts in the Top 20 at #17
This raises the question of how gold and copper and some juniors can be doing so well even as we hear remarkable bravado from Fed officials that interest rates are likely to stay higher for longer.
