TSX Venture junior gold stock Newcastle Gold (NCA:TSXV) is having a whale of a year. Its shares are on fire, up about 400% to a recent high of $0.84 from its 52-week low of $0.18 per share.
Looking at the stock chart, some investors have probably sold their shares, traded out of the stock or simply think that the run is perhaps near its end or even overdone. Take a look at the below chart and ask yourself: would you be able to hold or buy more, especially given the past few years we’ve seen in the gold sector?
Newcastle Gold – 1 Year Chart
Richard Warke steps into Newcastle Gold market
The company’s executive chairman has been buying large blocks of Newcastle Gold’s stock near its highs.
Richard Warke is the Executive Chairman for Newcastle Gold and bought almost 1.5 million shares on July 13th. After buying nearly 1 million shares in June, according to InsiderTracking.com, Warke eclipsed this total in a single day in July.
Newcastle touched a new 52-week high of $0.84 per share today. Two days ago, on July 13th, Warke made his purchases between $0.79 and $0.81 per share, according to InsiderTracking.com. If Warke was some young gun, or unproven in any way, I might not have felt compelled to write this note. However, he is anything but… check out his accolades below:
“He has been responsible for the founding and success of several resource companies including: Arizona Mining Inc., Augusta Resource Corporation, which was recently sold for $666 million, and the former Ventana Gold Corporation, which was sold in 2011 for $1.533 billion.”
Click here to read about Newcastle’s management team.
As an investor in junior resource stocks, the hardest thing to do… is having the fortitude to hold when a stock is going up quickly. This is harder than taking a loss, harder than following your own research when it comes time to buy and, most definitely, harder than determining what to buy. A slow and steady rise allows you to absorb the value being created and the strength of the sector to emerge. What we are seeing withgold stocks is a complete paradigm shift and rapid revaluations. With the market pricing in higher, not lower, gold prices expect these revaluations to continue.
As always, when it comes to investing in junior gold stocks, review insider buying and selling reports to stay on top of management ownership. Watching insiders buy at 52-week highs tells me they believe the gold bull market, which we sounded the alarm for on March 4th in 3 Reasons Gold Bull is Back (click here to read), has further to run.
In preparation for the current gold bull market, we published a mining-specific EBook where we reveal 50 leaders who took small-cap stocks to stunning multimillion and, in some cases, billion dollar buyouts. The companies these leaders run today are described in this one of a kind rolodex of some of the top entrepreneurs and business minds in the small-cap mining, technology and energy sectors.
Our ultimate guide to investing in gold stocks is a must-read resource to learn from data over the last several years and our tips and insights into reading potential investment opportunities in future.
This article represents solely the opinions of Alexander Smith. Alexander Smith is not an investment advisor and any reference to specific securities in the list referred to in the article does not constitute a recommendation thereof. Readers are encouraged to consult their investment advisors prior to making any investment decisions. The information in this article is of an impersonal nature and should not be construed as individualized advice or investment recommendations.
