While First Solar, Inc. (NASDAQ:FSLR) shareholders have enjoyed a good week with stock up 6.9%, they need remain vigilant. The fact that insiders chose to dispose of US$78m worth of stock in the past 12 months even though prices were relatively low could be indicative of some anticipated weakness.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for First Solar

First Solar Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Farhad Ebrahimi, sold US$77m worth of shares at a price of US$140 per share. That means that an insider was selling shares at slightly below the current price (US$169). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 21% of Farhad Ebrahimi's holding.

Over the last year, we can see that insiders have bought 14.93k shares worth US$1.4m. But insiders sold 2.31m shares worth US$78m. Over the last year we saw more insider selling of First Solar shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

First Solar Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at First Solar. Specifically, insider Farhad Ebrahimi ditched US$77m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership Of First Solar

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that First Solar insiders own 5.2% of the company, worth about US$944m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At First Solar Tell Us?

An insider sold stock recently, but they haven't been buying. Despite some insider buying, the longer term picture doesn't make us feel much more positive. It is good to see high insider ownership, but the insider selling leaves us cautious. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example - First Solar has 3 warning signs we think you should be aware of.

Of course First Solar may not be the best stock to buy. So you may wish to see this free collection of high quality 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, but not derivative transactions.

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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.