Even though Ovintiv Inc. (NYSE:OVV) has fallen by 12% over the past week , insiders who sold US$6.3m worth of stock over the past year have had less luck. The average selling price of US$49.58 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Ovintiv Insider Transactions Over The Last Year

The Senior Advisor, Renee Zemljak, made the biggest insider sale in the last 12 months. That single transaction was for US$3.9m worth of shares at a price of US$50.96 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$40.92. So it may not tell us anything about how insiders feel about the current share price.

Over the last year we saw more insider selling of Ovintiv shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like Ovintiv better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Ovintiv Insiders Are Selling The Stock

There was substantially more insider selling, than buying, of Ovintiv shares over the last three months. We note insiders cashed in US$805k worth of shares. On the other hand we note Independent Director Sippy Chhina bought US$58k worth of shares , as previously mentioned . The share price has moved a bit recently, but it's hard to argue that the selling is a positive.

Insider Ownership Of Ovintiv

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 0.5% of Ovintiv shares, worth about US$50m. 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 Ovintiv Insider Transactions Indicate?

The stark truth for Ovintiv is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 4 warning signs with Ovintiv and understanding these should be part of your investment process.

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 of direct interests only, but not derivative transactions or indirect interests.

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