Some INK picks have already doubled in the Venture V-shaped recovery

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Today in the INK Market Report, we highlighted the bull market in Canadian junior mining stocks. While the North American economy may be challenged to put in a V-shaped recovery, Canada's Venture market appears to be succeeding with that letter of the alphabet. The S&P/TSX Venture Index jumped 5.6% last week and the Index is now up year-to-date. Money is clearly moving into the sector, pushing up valuations.

Canada's Venture Index is up almost 4% year-to-date (click for larger)

 

With the junior market being so strong, financings are finally getting done in the junior space. While most of the newly-raised money heads into the ground for exploration, some of it inevitably will find its way into stock promotion campaigns. It is always a good idea to read the fine print of any free newsletter touting a stock to see if the newsletter writer is being paid for coverage.

Importantly, high-risk oriented investors considering placing money into a junior speculative play that is being promoted should look to see the amount of officer and director ownership and if any of them have been buying recently. If ownership is low and insider buying is nowhere to be seen, maybe consider another candidate.

At INK, we do not accept payments for stock coverage, and we will let the insiders guide us towards more opportunity. In this bull run, so far, so good. Since May 8th, two INK Morning Report stocks Galway Metals (GWM) and Pure Gold Mining (PGM) have already doubled in less than two months.

Galway Metals (GWM) highlighted in the INK Morning Report May 19th         

 

Pure Gold Mining highlighted in the INK Morning Report May 8th   

 

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While insider buying has recently tapered, our Venture Index remains in a bullish pattern for those risk-tolerant investors with a 12-month time horizon. Moreover, we could see insider buying pick up again if there is a cooling-off period for the juniors at some point this summer. That remains a significant possibility, so we will keep a bit of dry powder ready in order to take advantage of any low-volume selloffs which often happen in the junior market during July and August.

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Disclosure: One or more INK employees holds GWM.

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