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

Even though Enphase Energy, Inc. (NASDAQ:ENPH) has fallen by 12% over the past week , insiders who sold US$46m worth of stock over the past year have had less luck. Insiders would probably have been better off holding on to their shares given that the average selling price of US$124 is still lower than the current share price.

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.

View our latest analysis for Enphase Energy

Enphase Energy Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Independent Director, Thurman Rodgers, for US$41m worth of shares, at about US$130 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$92.04). So it is hard to draw any strong conclusion from it.

In the last twelve months insiders purchased 9.12k shares for US$1m. But insiders sold 369.71k shares worth US$46m. Over the last year we saw more insider selling of Enphase Energy shares, than buying. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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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. We usually like to see fairly high levels of insider ownership. Enphase Energy insiders own about US$387m worth of shares (which is 3.1% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Enphase Energy Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. While we feel good about high insider ownership of Enphase Energy, we can't say the same about the selling of shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Enphase Energy. Case in point: We've spotted 1 warning sign for Enphase Energy you should be aware of.

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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.