Over the last year, a good number of insiders have significantly increased their holdings in SolarEdge Technologies, Inc. (NASDAQ:SEDG). This is encouraging because it indicates that insiders are more optimistic about the company's prospects.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
SolarEdge Technologies Insider Transactions Over The Last Year
The Independent Director Avery More made the biggest insider purchase in the last 12 months. That single transaction was for US$1.1m worth of shares at a price of US$71.44 each. That means that even when the share price was higher than US$54.51 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Over the last year, we can see that insiders have bought 28.18k shares worth US$2.1m. But they sold 170.00 shares for US$50k. In the last twelve months there was more buying than selling by SolarEdge Technologies insiders. 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!
SolarEdge Technologies 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.
Insiders At SolarEdge Technologies Have Bought Stock Recently
It's good to see that SolarEdge Technologies insiders have made notable investments in the company's shares. Independent Director Avery More spent US$474k on stock, and there wasn't any selling. That shows some optimism about the company's future.
Does SolarEdge Technologies Boast High Insider Ownership?
Many investors like to check how much of a company is owned by 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. It appears that SolarEdge Technologies insiders own 0.9% of the company, worth about US$29m. 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 SolarEdge Technologies Insider Transactions Indicate?
It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest SolarEdge Technologies insiders are well aligned, and that they may think the share price is too low. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 3 warning signs for SolarEdge Technologies you should be aware of.
But note: SolarEdge Technologies 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 of direct interests only, but not derivative transactions or indirect interests.
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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.