Investors who take an interest in Cenovus Energy Inc. (TSE:CVE) should definitely note that the Independent Chairman of the Board, Keith A. MacPhail, recently paid CA$7.54 per share to buy CA$347k worth of the stock. Although the purchase only increased their holding by 9.6%, it is still a solid purchase in our view.
The Last 12 Months Of Insider Transactions At Cenovus Energy
Over the last year, we can see that the biggest insider purchase was by CEO, President & Director Alexander Pourbaix for CA$502k worth of shares, at about CA$9.04 per share. That means that an insider was happy to buy shares at above the current price of CA$7.57. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Cenovus Energy insiders may have bought shares in the last year, but they didn't sell any. They paid about CA$5.80 on average. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
Cenovus Energy is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does Cenovus Energy 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Cenovus Energy insiders own 0.2% of the company, worth about CA$20m. 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?
The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. 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 Cenovus Energy we think they are probably pretty confident of a bright future. 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. Our analysis shows 2 warning signs for Cenovus Energy (1 is a bit unpleasant!) and we strongly recommend you look at these before investing.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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. 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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