Selling FTC Solar Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders

Despite the fact that FTC Solar, Inc.'s (NASDAQ:FTCI) value has dropped 21% in the last week insiders who sold US$2.5m worth of stock in the past 12 months have had less success. Given that the average selling price of US$2.73 is still lower than the current share price, insiders would probably have been better off keeping their shares.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for FTC Solar

The Last 12 Months Of Insider Transactions At FTC Solar

In the last twelve months, the biggest single sale by an insider was when the Chief Commercial Officer, Patrick Cook, sold US$537k worth of shares at a price of US$2.34 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$1.38). So it may not tell us anything about how insiders feel about the current share price.

Over the last year, we can see that insiders have bought 642.40k shares worth US$1.5m. But insiders sold 911.76k shares worth US$2.5m. All up, insiders sold more shares in FTC Solar than they bought, over the last year. 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!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insiders At FTC Solar Have Sold Stock Recently

The last three months saw significant insider selling at FTC Solar. In total, insiders dumped US$642k 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

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. FTC Solar insiders own about US$53m worth of shares. That equates to 34% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The FTC Solar Insider Transactions Indicate?

Insiders sold FTC Solar shares recently, but they didn't buy any. Despite some insider buying, the longer term picture doesn't make us feel much more positive. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 4 warning signs with FTC Solar and understanding them should be part of your investment process.

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.