When insiders like Warren Buffett make investments in sectors like gold/precious metals, that have previously been publicly denounced as poor investments, investors take notice. The recent move by the Oracle of Omaha to take a stake in Canadian gold mining giant Barrick Gold (TSX:ABX)(NYSE:GOLD) is a notable one. This move reinforces the value that has existed for quite some time in this sector.

The gold mining space is one which has not appreciated as it should have through the recent gold price increase we’ve seen. Investors continue to discount future cash flows for mines at significantly lower long term prices than spot. This results in a large value gap, which has become noticed by the best value investors out there. I highly recommend all investors interested in finding deep value in today’s otherwise overpriced market look to this move by Buffett as evidence of the value that exists in the gold mining sector today.

As always, please remember to consult with a certified financial advisor and do your own homework before making investing decisions. Insider buying and selling activity is not necessarily indicative of the future performance of a given company’s stock price, and insiders regularly buy or sell positions in companies they own or manage for reasons other than expectations of future stock price performance.

Analyzing insider transactions in a given stock is one tool of many to glean pertinent information to assist in investment decision making.

Invest wisely, my friends.