We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Enphase Energy, Inc. (NASDAQ:ENPH), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
Enphase Energy Insider Transactions Over The Last Year
VP & Chief Commercial Officer David Ranhoff made the biggest insider sale in the last 12 months. That single transaction was for US$549k worth of shares at a price of US$9.15 each. So what is clear is that an insider saw fit to sell at around the current price of US$8.99. They could have a variety of motivations for selling, but it’s still not particularly encouraging to see. Arguably, insider selling at around current prices should give us reason to reflect on whether the stock is fully valued at the moment. The only individual insider seller over the last year was David Ranhoff.
In the last twelve months insiders purchased 71.30k shares for US$446k. But they sold 60.00k for US$549k. You can see a visual depiction of insider transactions (by 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Enphase Energy Insiders Are Selling The Stock
There was substantially more insider selling, than buying, of Enphase Energy shares over the last three months. We note David Ranhoff cashed in US$549k worth of shares. Meanwhile insiders bought US$187k worth. Since the selling really does outweigh the buying, we’d say that these transactions may suggest that some insiders feel the company has been fully valued in recent months.
Does Enphase Energy Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Enphase Energy insiders own 13% of the company, currently worth about US$123m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Enphase Energy Insider Transactions Indicate?
The stark truth for Enphase Energy is that there has been more insider selling than insider buying in the last three months. Zooming out, the longer term picture doesn’t give us much comfort. It is good to see high insider ownership, but the insider selling leaves us cautious. Of course, the future is what matters most. So if you are interested in Enphase Energy, you should check out this free report on analyst forecasts for the company.
But note: Enphase Energy 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.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.