Did insiders of Canadian Natural Resources Limited (TSE:CNQ) sell their shares?


Some Canadian Natural Resources Limited (TSE:CNQ) Shareholders might be a bit concerned that Executive Chairman Norman Edwards recently sold C$10 million worth of shares at C$84.23 per share. However, that sale was only 0.6% of their stake, so that probably doesn’t say much about their conviction.

Check out our latest analysis for Canadian Natural Resources

The last 12 months of insider trading at Canadian Natural Resources

In fact, the recent sale by Executive Chairman Norman Edwards wasn’t their only sale of Canadian Natural Resources stock this year. Previously, they made an even bigger sale of shares worth -C$13 million at a price of C$66.49 per share. This means that even when the stock price was below the current price of C$84.99, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they consider this lower price to be fair. This makes us wonder what they think of the recent (higher) valuation. While insider selling is not a positive sign, we can’t be sure if it means insiders believe the stock is fully priced, so it’s only a weak sign. We note that the largest sale involved only 0.9% of Norman Edwards’ stake.

Fortunately, we note that last year insiders paid C$751,000 for 16,600 shares. But they sold 1.23 million shares for C$72 million. In total, Canadian Natural Resources insiders have sold more than they have bought over the past year. The chart below shows insider trading (by companies and individuals) over the past year. If you want to know exactly who sold, how much and when, just click on the chart below!

TSX:CNQ Insider Trading Volume May 30, 2022

I’ll appreciate Canadian Natural Resources more if I see big insider buying. In the meantime, watch this free list of growing companies with significant and recent insider buying.

Canadian Natural Resources Insider Ownership

Another way to test alignment between a company’s executives and other shareholders is to look at how many shares they own. High insider participation often makes company management more concerned with the interests of shareholders. It’s great to see Canadian Natural Resources insiders owning 2.2% of the company, worth approximately C$2.2 billion. This type of significant insider ownership generally increases the chances that the company will be run in the best interests of all shareholders.

So what does this data suggest about Canadian natural resource insiders?

Unfortunately, there have been more insider sales than purchases of Canadian Natural Resources stock over the past three months. And our longer-term analysis of insider trading didn’t provide confidence either. But since Canadian Natural Resources is profitable and growing, that doesn’t worry us too much. It’s good to see strong insider ownership, but insider selling leaves us cautious. In addition to knowing what insider trading is going on, it is beneficial to identify the risks that Canadian Natural Resources faces. For example, Canadian Natural Resources has 2 warning signs (and 1 that makes us a little uneasy) we think you should know.

But note: Canadian Natural Resources may not be the best stock to buy. So take a look at this free list of interesting companies with high ROE and low debt.

For the purposes of this article, insiders are persons who report their transactions to the relevant regulatory body. We currently record open market transactions and private dispositions, but not derivative transactions.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.


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