Forget Greece and the EU, today’s headlines are about Iran, Israel, nuclear weapons, oil prices, sanctions, military satellites and tense political exchanges. The news circuits report that the tensions in the Middle East are building up with every passing day, and there’s no telling how it will end or how far its effects will reach.
Secretary of Defense Leon Panetta believes there is a strong likelihood Israel will strike Iran in the spring. He and other U.S. officials have repeatedly warned Israel not to act alone.
Meanwhile, Brigadier-General Mohammad Pakpour, the head of ground forces for Iran’s Revolutionary Guard Corps said on Sunday that Iran would never be the initiator of a war, though its response to aggression will be “crushing.”
Whether you believe a war in the Middle East is actually coming or not, the threats can be just as harmful to a market bracing for impact. And as an investor, it would be prudent to explore the potential impacts of a nuclear war before the market starts pricing it in.
Market Reactions
So, how does a market prepare for a nuclear standoff?
Richard Russell, writer of the Dow Theory Letters says, “Actually, the stock market is acting as though something momentous and frightening is ‘out there.’ The roof of a monster top is building. Gold keeps creeping higher…The next target for gold is to trade into the 1800s, and it’s getting close.”
Oil prices would also serge from a Middle Eastern war as supplies are cut off.
Business Section: Investing Ideas
Any Iran-Israel showdown is likely to boost oil and gold prices, but which gold and oil stocks are expected to benefit the most?
For ideas, we collected data on institutional money flows, and identified 10 gold and oil stocks that have seen significant institutional buying during the current quarter.
Big money managers have extensive resources to analyze investing ideas. So if they’re buying a certain stock, it’s worth paying close attention.
Do you agree with this bullish sentiment? Use this list as a starting point for your own analysis.
Interactive Chart: Use the Compar-O-Matic to compare market caps for all the stocks mentioned below:
1. AuRico Gold Inc. Ordinary Share (AUQ, Earnings, Analysts, Financials): Engages in the exploration, development, and production of gold and silver mines and projects in Mexico. Net institutional purchases in the current quarter at 15.0M shares, which represents about 5.35% of the company’s float of 280.21M shares.
2. Aurizon Mines Ltd. (AZK, Earnings, Analysts, Financials): Engages in the acquisition, exploration, development, and operation of gold properties in North America. Net institutional purchases in the current quarter at 7.0M shares, which represents about 4.34% of the company’s float of 161.39M shares.
3. Central GoldTrust (GTU, Earnings, Analysts, Financials): Primarily invests in unencumbered gold bullion. Net institutional purchases in the current quarter at 1.2M shares, which represents about 7.21% of the company’s float of 16.64M shares.
4. Jaguar Mining Inc (JAG, Earnings, Analysts, Financials): Engages in the production of gold, as well as in the acquisition, exploration, development, and operation of gold mineral properties in Brazil. Net institutional purchases in the current quarter at 7.7M shares, which represents about 10.49% of the company’s float of 73.37M shares.
5. Lake Shore Gold Corp (LSG, Earnings, Analysts, Financials): Engages in the acquisition, exploration, and development of gold properties in northern Ontario and Quebec of Canada, as well as in Mexico. Net institutional purchases in the current quarter at 123.1M shares, which represents about 32.67% of the company’s float of 376.75M shares.
6. Midway Gold Corp. (MDW, Earnings, Analysts, Financials): Engages in the acquisition, exploration, and development of mineral properties in North America. Net institutional purchases in the current quarter at 5.6M shares, which represents about 7.15% of the company’s float of 78.34M shares.
7. NovaGold Resources Inc. (NG, Earnings, Analysts, Financials): Engages in the exploration and development of mineral properties primarily in North America. Net institutional purchases in the current quarter at 22.0M shares, which represents about 13.27% of the company’s float of 165.74M shares.
8. Pogo Producing Co. (PPP, Earnings, Analysts, Financials): Engages in the production of precious metals in Mexico. Net institutional purchases in the current quarter at 20.3M shares, which represents about 40.54% of the company’s float of 50.07M shares.
9. Richmont Mines Inc. (RIC, Earnings, Analysts, Financials): Engages in the acquisition, exploration, development, and operation of mining properties, principally gold in northeast Canada. Net institutional purchases in the current quarter at 1.8M shares, which represents about 6.23% of the company’s float of 28.89M shares.
10. International Tower Hill Mines Ltd (THM, Earnings, Analysts, Financials): Engages in the acquisition, exploration, and development of mineral properties in Alaska and Nevada. Net institutional purchases in the current quarter at 4.9M shares, which represents about 7.12% of the company’s float of 68.80M shares.
(Written by Rebecca Lipman, list compiled by Eben Esterhuizen, CFA. Institutional data sourced from Fidelity.)
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Analyze These Ideas: Getting Started
- Read descriptions for all companies mentioned
- Access a performance overview for all stocks in the list
- Compare analyst ratings for the companies mentioned
- Compare analyst ratings to annual returns for stocks mentioned
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Dig Deeper: Access Company Snapshots, Charts, Filings
- AuRico Gold Inc. Ordinary Share (AUQ, Chart, Download SEC Filings)
- Aurizon Mines Ltd. (AZK, Chart, Download SEC Filings)
- Central GoldTrust (GTU, Chart, Download SEC Filings)
- Jaguar Mining Inc (JAG, Chart, Download SEC Filings)
- Lake Shore Gold Corp (LSG, Chart, Download SEC Filings)
- Midway Gold Corp. (MDW, Chart, Download SEC Filings)
- NovaGold Resources Inc. (NG, Chart, Download SEC Filings)
- Pogo Producing Co. (PPP, Chart, Download SEC Filings)
- Richmont Mines Inc. (RIC, Chart, Download SEC Filings)
- International Tower Hill Mines Ltd (THM, Chart, Download SEC Filings)
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Everything is connected to Iran, example it keeps Assad busy and weakens him, Turkey wanted influence they got, before it was via conflict with Israel, now it is via the Syria uprising. Turkey and Syria are no longer friends. Hamas were bashed in 2009/09, moving from Syria, clearing the decks, Hizbullah do they attack to save Assad and then Iran lose their ability for a counter strike, what happens once Iran is hit, Assad is weakened and Hizbullah fire all their shoots after a strike on Iran, strategic dilemma. Would Assad like Hizbullah to take the heat off him sure, is that in Iran's interest re:nuclear, no. Should they attack first,lose the deterrent, civil unrest in Russia, Putin greatest domestic challenge, possible civil war. People can debate if there will be a strike on Iran, but who goes to all that trouble for nothing. And someone has gone to a awful lot of trouble.