Yahoo Finance First Solar Insiders Placed Bullish Bets Worth US$74.4m
Multiple insiders secured a larger position in First Solar, Inc. (NASDAQ:FSLR) shares over the last 12 months. This is reassuring as this suggests that insiders have increased optimism about the company's prospects.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
Check out our latest analysis for First Solar
First Solar Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider Farhad Ebrahimi for US$74m worth of shares, at about US$175 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$152). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. We note that Farhad Ebrahimi was both the biggest buyer and the biggest seller.
Happily, we note that in the last year insiders paid US$74m for 503.07k shares. But they sold 129.44k shares for US$20m. Overall, First Solar insiders were net buyers during the last year. They paid about US$148 on average. It's great to see insiders putting their own cash into the company's stock, albeit at below the recent share price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
First Solar Insiders Bought Stock Recently
Over the last three months, we've seen significantly more insider buying, than insider selling, at First Solar. We can see that insider Farhad Ebrahimi paid US$74m for shares in the company. But we did see insider Farhad Ebrahimi sell shares worth US$14m. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.
Insider Ownership
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. First Solar insiders own 5.6% of the company, currently worth about US$912m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About First Solar Insiders?
It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about First Solar. Looks promising! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 1 warning sign for First Solar you should know about.
But note: First Solar 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.
