NuVista Energy Ltd.'s (TSE:NVA) insiders who sold earlier this year may be offered solace in this recent price drop

By
Simply Wall St
Published
May 13, 2022
TSX:NVA
Source: Shutterstock

Even though NuVista Energy Ltd. (TSE:NVA) has fallen by 10% over the past week , insiders who sold CA$1.5m worth of stock over the past year have had less luck. Insiders might have been better off holding onto their shares, given that the average selling price of CA$7.34 is still below the current share price.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for NuVista Energy

The Last 12 Months Of Insider Transactions At NuVista Energy

Over the last year, we can see that the biggest insider sale was by the Independent Director, Keith A. MacPhail, for CA$1.3m worth of shares, at about CA$7.27 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of CA$11.02. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 5.0% of Keith A. MacPhail's holding. Keith A. MacPhail was the only individual insider to sell shares in the last twelve months.

Keith A. MacPhail divested 200.00k shares over the last 12 months at an average price of CA$7.34. 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!

insider-trading-volume
TSX:NVA Insider Trading Volume May 13th 2022

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does NuVista Energy Boast High 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. NuVista Energy insiders own about CA$128m worth of shares. That equates to 5.1% 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.

What Might The Insider Transactions At NuVista Energy Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the NuVista Energy insiders selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing NuVista Energy. Case in point: We've spotted 2 warning signs for NuVista Energy you should be aware of.

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, but not derivative transactions.

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