We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Cenovus Energy Inc. (TSE:CVE).
What Is Insider Buying?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
See our latest analysis for Cenovus Energy
The Last 12 Months Of Insider Transactions At Cenovus Energy
In the last twelve months, the biggest single purchase by an insider was when CEO, President & Director Alexander Pourbaix bought CA$983k worth of shares at a price of CA$9.10 per share. Although we like to see insider buying, we note that this large purchase was at significantly lower prices. It may not shed much light on insider confidence at the current share price.
Happily, we note that in the last year insiders bought 251.37k shares for a total of CA$2.6m. In the last twelve months there was more buying than selling by Cenovus Energy insiders. The average buy price was around CA$10.21. It’s great to see insiders putting their own cash into the company’s stock, albeit at below the recent share price (CA$12.15). The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Cenovus Energy is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Cenovus Energy Have Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Cenovus Energy. Not only was there no selling that we can see, but they collectively bought CA$745k worth of shares. This is a positive in our book as it implies some confidence.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 0.2% of Cenovus Energy shares, worth about CA$24m. 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 is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. But we don’t feel the same about the fact the company is making losses. Given that insiders also own a fair bit of Cenovus Energy we think they are probably pretty confident of a bright future. Of course, the future is what matters most. So if you are interested in Cenovus Energy, you should check out this free report on analyst forecasts for the company.
Of course Cenovus Energy may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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