Insiders who bought First Solar, Inc. (NASDAQ:FSLR) in the last 12 months may probably not pay attention to the stock's recent 13% drop. Reason being, despite the recent loss, insiders original purchase value of US$74.3m is now worth US$113.3m.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At First Solar
The insider Farhad Ebrahimi made the biggest insider purchase in the last 12 months. That single transaction was for US$74m worth of shares at a price of US$175 each. We do like to see buying, but this purchase was made at well below the current price of US$225. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
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!
First Solar is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders At First Solar Have Sold Stock Recently
The last three months saw significant insider selling at First Solar. Specifically, insiders ditched US$5.7m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. First Solar insiders own about US$1.3b worth of shares (which is 5.6% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About First Solar Insiders?
Insiders sold stock recently, but they haven't been buying. In contrast, they appear keener if you look at the last twelve months. And insider ownership remains quite considerable. So we're not too bothered by recent selling. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that First Solar is showing 2 warning signs in our investment analysis, and 1 of those shouldn't be ignored...
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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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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