Read This Before Buying Canadian Natural Resources Limited (TSE:CNQ) Shares

Simply Wall St
March 20, 2019
Source: Shutterstock

It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Canadian Natural Resources Limited (TSE:CNQ), you may well want to know whether insiders have been buying or selling.

Do Insider Transactions Matter?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.

We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'

Check out our latest analysis for Canadian Natural Resources

Canadian Natural Resources Insider Transactions Over The Last Year

Senior Vice-President of Marketing Réal Cusson made the biggest insider sale in the last 12 months. That single transaction was for CA$3.7m worth of shares at a price of CA$47.44 each. That is hardly a positive sign, even though it took place above the latest price (CA$36.94). So it is hard to draw any strong conclusion from it. Notably Réal Cusson was also the biggest buyer, having purchased CA$4.4m worth of shares.

Over the last year, we can see that insiders have bought 125.50k shares worth CA$4.4m. On the other hand they divested 148.06k shares, for CA$6.9m. Over the last year we saw more insider selling of Canadian Natural Resources shares, than buying. They sold for an average price of about CA$46.67. It is certainly not great to see that insiders have sold shares in the company. But the selling was at much higher prices than the current share price (CA$36.94), so it probably doesn't tell us a lot about the value on offer today. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

TSX:CNQ Recent Insider Trading, March 20th 2019
TSX:CNQ Recent Insider Trading, March 20th 2019

If you like to buy stocks alongside management, then you might just love this freelist of companies. (Hint: insiders have been buying them).

Does Canadian Natural Resources Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Canadian Natural Resources insiders own 2.3% of the company, worth about CA$1.0b. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Canadian Natural Resources Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Canadian Natural Resources insider transactions don't fill us with confidence. Therefore, you should should definitely take a look at this FREEreport showing analyst forecasts for Canadian Natural Resources.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this freelist of interesting companies, that have HIGH return on equity and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.