Famed precious metals investor Eric Sprott recently sold 1 million shares of Kirkland Lake Gold after the gold company’s shares doubled.
The recently retired day-to-day portfolio manager and current Chairman at Sprott Asset Management has been guiding his company into new waters of late. Before explaining how Sprott has diversified its holdings into other asset classes than just resource concentrated assets, let’s review his recent sells.
Sprott sells Kirkland Lake Gold
In a recent article from CanadianInsider, titled Money is Moving, Sprott’s recent selling pattern in Kirkland Lake Gold revealed:
“Eric S. Sprott, a Director, disposed of 1,000,000 Common Shares on a direct ownership basis at prices ranging from $9.013 to $9.435 between March 14th and 18th, 2016. This represents a $9,154,156 divestment of the company’s shares and an account share holdings change of -18.2%.”
Sprott’s selling comes after a monster rally in Kirkland Lake Gold’s stock. Take a look at the company’s 1-year chart below:
Aside from the recent run up in Kirkland’s share price, the company is hot off a recent acquisition of St. Andrews Goldfields.
Mr. George Ogilvie, Kirkland Lake’s CEO weighed in on the company’s recent financials and acquisition:
“We are pleased to be able to report a seventh consecutive quarter of positive earnings and free cash flow generation, which has resulted in our cash balance continuing to grow.
Post year end we completed the acquisition of St Andrew Goldfields; which, along with higher gold prices, further boosted our cash balance to approximately $110 million. We believe the pro-forma company will continue to show improvements in its key business metrics allowing us to further deleverage the company over the course of the next two years.”
Click here to read more quotes and the company’s recent press release from March 10th.
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In a FP Street article, titled New era at Sprott as asset manager sheds resource reliance, Sprott’s divergence from the resource sector is highlighted:
“…for the first time, the majority of the assets it manages are now in non-resource focused strategies. And plans call for the manager to boost its already strong passive management business, which grew by about $1 billion a year from 2010 to 2012 and now represents about $3 billion of its total assets under management.”
Miners have not been forgotten…
“…in 2014 it launched the Sprott Gold Miners ETF which has raised $275 million and plans to launch the Sprott Junior Gold Miners ETF in the next quarter.”
With many gold miners having doubled or tripled in recent weeks the timing on Sprott’s latest launch could be perfect.
Commodities have continued to get a boost as net selling in the U.S. markets has continued for an 8th consecutive week. In a ZeroHedge.com article from this morning,
“This Is Unprecedented”: Smart Money Throws Up All Over “Rally”, Sells Stocks For Eight Straight Weeks:
“As BofA’s Jill Hall writes, “last week, during which the S&P 500 climbed 1.4%, BofAML clients were net sellers of US stocks for the eighth consecutive week, in the amount of $1.4bn—suggesting clients still doubt the sustainability of the rally. This is the longest selling streak since Oct-Dec 2010, when clients sold stocks for 12 consecutive weeks…”
Click here to read more.
Canada’s markets have benefited from a stabilizing gold price, rising oil prices and an overall decline in the U.S. dollar as the Fed fails to raise rates. As legendary investors such as Eric Sprott sell gold stocks such as Kirkland Lake Gold near 52-week highs, some resource investors have to be doing some critical thinking.
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.