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Last week, Ovintiv Inc. (TSE:OVV) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 17% last week, resulting in a increase in the company's market worth. As a result, the stock they originally bought for US$711k is now worth US$962k.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
Ovintiv Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Senior Vice President of Investor Relations, Stephen Campbell, for CA$369k worth of shares, at about CA$30.77 per share. That means that an insider was selling shares at slightly below the current price (CA$37.80). 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was 100% of Stephen Campbell's stake.
Happily, we note that in the last year insiders paid CA$711k for 25.46k shares. But insiders sold 27.86k shares worth CA$698k. In the last twelve months there was more buying than selling by Ovintiv insiders. They paid about CA$27.93 on average. We don't deny that it is nice to see insiders buying stock in the company. However, we do note that they were buying at significantly lower prices than today's share price. 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!
Ovintiv is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Ovintiv Insiders Bought Stock Recently
It's good to see that Ovintiv insiders have made notable investments in the company's shares. Independent Director Katherine Minyard spent CA$638k on stock, and there wasn't any selling. This is a positive in our book as it implies some confidence.
Does Ovintiv Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Ovintiv insiders own 0.2% of the company, worth about CA$20m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Ovintiv Insider Transactions Indicate?
It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Given that insiders also own a fair bit of Ovintiv we think they are probably pretty confident of a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Ovintiv. At Simply Wall St, we found 1 warning sign for Ovintiv that deserve your attention before buying any shares.
But note: Ovintiv may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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.
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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