Insiders who purchased this year lose US$101k as FTC Solar, Inc. (NASDAQ:FTCI) stock drops to US$3.60

By
Simply Wall St
Published
February 23, 2022
NasdaqGM:FTCI
Source: Shutterstock

Insiders who acquired US$162k worth of FTC Solar, Inc.'s (NASDAQ:FTCI) stock at an average price of US$9.63 in the past 12 months may be dismayed by the recent 15% price decline. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth US$60k, which is not what they expected.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for FTC Solar

FTC Solar Insider Transactions Over The Last Year

The President Sean Hunkler made the biggest insider purchase in the last 12 months. That single transaction was for US$152k worth of shares at a price of US$9.47 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$3.60). 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. In our view, the price an insider pays for shares is very important. 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.

FTC Solar insiders may have bought shares in the last year, but they didn't sell any. 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!

insider-trading-volume
NasdaqGM:FTCI Insider Trading Volume February 23rd 2022

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insider Ownership of FTC Solar

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that FTC Solar insiders own 48% of the company, worth about US$167m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At FTC Solar Tell Us?

It doesn't really mean much that no insider has traded FTC Solar shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, FTC Solar insiders feel good about the company's future. 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. In terms of investment risks, we've identified 1 warning sign with FTC Solar and understanding this should be part of your investment process.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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, but not derivative transactions.

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