Heading for the Exit: 7 Gold Stocks Being Sold by the Smart Money

If you think big money managers and celebrity investing gurus are the only ones who stand to profit off a gold rally, guess again. Following a brief correction earlier in the month, gold looks to be on an upward trajectory once again -- and retail investors may be playing a significant role in fueling its rise.

Individuals looking to take shelter from the declining dollar and cash in on yellow fever have swarmed to physical gold-backed ETFs. In fact, they comprise somewhere between 60%-70% of SPDR Gold Trust, the biggest gold ETF, second in size only to the SPDR S&P 500.

And iShares Gold Trust, the next largest gold ETF, arguably caters to the self-directed retail category with its 10-1 share split. According to Jason Toussaint, Managing Director for the World Gold Council, "the size is a disadvantage for high-net worth and institutional clients."

But with gold ETFs heavily weighted with individual investors, there's fear that a sudden price drop could spell trouble for the sector at large. Retail investors have a tendency to react emotionally -- and violently -- to unexpected news or market moves. Which could translate into an abrupt and dramatic flight from the gold ETFs they initially flocked to.

So if individuals are partially responsible for blowing up the gold bubble, will it pop if they flee these funds? Only time will tell, but it's definitely worth keeping this story on your radar.

But the more important question we want answered is, what are the big money managers doing with gold stocks? Do these managers think gold is a bubble, and which companies are they selling? (Click here to access free, interactive tools to analyze these ideas.)

These mega investors are in charge of millions upon millions in investments--so it's safe to assume they're going to do their homework before they put their clients' money on the line. Here's a list of seven gold stocks being sold by the smart money ...

Company

Shares Held by Inst. Investors at Present

Shares Held by Inst. Investors 3 Months Ago

% Change in Inst. Ownership

Richmont Mines (NYSE: RIC  )

8,579,250

9,962,554

-13.89%

Harmony Gold Mining Co.   (NYSE: HMY  )

98,335,430

103,934,789

-5.39%

Allied Nevada Gold (NYSE: ANV  )

81,245,010

84,780,630

-4.17%

Randgold Resources (Nasdaq: GOLD  )

58,870,737

60,693,019

-3.00%

Golden Star Resources (NYSE: GSS  )

158,834,195

163,136,646

-2.64%

Barrick Gold (NYSE: ABX  )

717,006,270

735,903,068

-2.57%

Compania de Minas Buenaventura (NYSE: BVN  )

119,850,687

121,314,830

-1.21%

Interactive Chart: Press Play to see how the market caps have changed for all stocks mentioned above.


Kapitall's Eben Esterhuizen and Alicia Sellitti do not own shares of any companies mentioned.

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 03, 2010, at 7:35 AM, daveberman7 wrote:

    How do people selling gold stocks become smart money? Aren"t these the same

    people telling us gold is going to hit 1900 or 2000dollars in the future, but selling gold stocks makes them smart. What am I missing here?

    I"m sorry I think they are morons. Gold hasn"t started yet . They are going to be praying that the good old days of 1500 dollars in the not to distant future , Yeah smart money keep on sellin and me the stupid money will keep on buyin .

  • Report this Comment On December 03, 2010, at 9:42 AM, daveberman7 wrote:

    Feelin good yet ?

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