Bullish Cenovus Energy Insiders Loaded Up On CA$5.52m Of Stock

Multiple insiders secured a larger position in Cenovus Energy Inc. (TSE:CVE) shares over the last 12 months. This is reassuring as this suggests that insiders have increased optimism about the company's prospects.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Cenovus Energy

The Last 12 Months Of Insider Transactions At Cenovus Energy

The President Jonathan McKenzie made the biggest insider purchase in the last 12 months. That single transaction was for CA$1.5m worth of shares at a price of CA$29.25 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$28.62). Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

While Cenovus Energy insiders bought shares during the last year, they didn't sell. They paid about CA$24.39 on average. We don't deny that it is nice to see insiders buying stock in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insiders At Cenovus Energy Have Bought Stock Recently

It's good to see that Cenovus Energy insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought CA$2.8m worth of shares. That shows some optimism about the company's future.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Cenovus Energy insiders own about CA$55m worth of shares. That equates to 0.1% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Cenovus Energy Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest Cenovus Energy insiders are well aligned, and that they may think the share price is too low. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 1 warning sign for Cenovus Energy you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.