According to a filing with the SEC, a trust connected to Newmont Mining Corp (NYSE:NEM) CEO Gary Goldberg acquired 3,000 shares of stock on May 2nd at an average price of $32.81 per share. Goldberg had been the $17 billion market cap gold and copper miner’s chief operating officer for a little over a year before being named the new CEO in early March of this year. We track insider purchases because studies show that on average there is a small outperformance effect for stocks bought by insiders (read our analysis of studies on insider trading). The theoretical explanation for this is that insiders should only buy shares when they are confident in the stock’s prospects, otherwise preferring to diversify. We would note that our database of insider trading filings shows Goldberg purchasing 1,000 shares in March 2012 and then another 1,000 shares in July; the stock is down considerably from its levels at those times, so he does not have the best track record in identifying periods of strong upside.
Specifically, Newmont Mining Corp (NYSE:NEM) is down 30% year to date as the gold market has not been strong and the company has reported some numbers below analyst expectations. In the first quarter of 2013, revenue fell by 19% versus a year earlier. With the company’s expenses not changing much in absolute terms, this had an even stronger impact on margins with the result being a 41% decline in earnings. The decline in the stock price, however, has at least made Newmont Mining Corp (NYSE:NEM) somewhat cheap at a trailing P/E of 10, though of course any value case would depend on the business stabilizing its performance at current levels or growing slightly. Newmont Mining Corp (NYSE:NEM) did recently increase its quarterly dividend payment, and now carries a yield of 4.3%.
In addition to insider trading activity, we also follow 13F filings from hedge funds and other notable investors. This information can be used to develop profitable investing strategies; for example, we have found that the most popular small cap stocks among hedge funds generate an average excess return of 18 percentage points per year (learn more about our small cap strategy). It can also be used to identify individual owners of a particular stock. First Eagle Investment Management was the largest shareholder in Newmont Mining Corp (NYSE:NEM) at the beginning of 2013 out of the filers we track, reporting a position of 6.3 million shares (find First Eagle’s favorite stocks). Billionaire Mario Gabelli’s GAMCO Investors slightly increased its stake to a total of 1.8 million shares (check out Gabelli’s stock picks).