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Cenovus Energy Inc. (TSE:CVE) is up 6.0%, while insiders who purchased CA$6.1m are up 7.5%

·3 min read

Insiders who bought Cenovus Energy Inc. (TSE:CVE) stock in the last 12 months were richly rewarded last week. The company's market value increased by CA$2.5b as a result of the stock's 6.0% gain over the same period. As a result, the stock they originally bought for CA$6.1m is now worth CA$6.5m.

Although we don't think shareholders should simply follow insider transactions, 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

Over the last year, we can see that the biggest insider sale was by the Executive Vice President of Natural Gas & Technical Services, Joseph Zieglgansberger, for CA$2.6m worth of shares, at about CA$26.00 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of CA$23.30. So it is hard to draw any strong conclusion from it.

In the last twelve months insiders purchased 280.31k shares for CA$6.1m. But they sold 122.28k shares for CA$3.0m. Overall, Cenovus Energy insiders were net buyers during the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
insider-trading-volume

Cenovus Energy is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Cenovus Energy Insiders Are Selling The Stock

There was substantially more insider selling, than buying, of Cenovus Energy shares over the last three months. In that time, Executive Vice President of Natural Gas & Technical Services Joseph Zieglgansberger dumped CA$2.6m worth of shares. Meanwhile insiders bought CA$2.3m worth. We don't view these transactions as a positive sign.

Does Cenovus Energy Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company 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$91m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Cenovus Energy Insider Transactions Indicate?

The insider sales have outweighed the insider buying, at Cenovus Energy, in the last three months. In contrast, they appear keener if you look at the last twelve months. And insiders do own shares. So the recent selling doesn't worry us too much. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 2 warning signs for Cenovus Energy you should be aware of, and 1 of them is a bit unpleasant.

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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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