This First Solar Insider Increased Their Holding By 104% Last Year

From what we can see, insiders were net buyers in First Solar, Inc.'s (NASDAQ:FSLR ) during the past 12 months. That is, insiders acquired the stock in greater numbers than they sold it.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for First Solar

First Solar Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Farhad Ebrahimi bought US$349m worth of shares at a price of US$200 per share. That means that even when the share price was higher than US$185 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Farhad Ebrahimi was the only individual insider to buy during the last year. We note that Farhad Ebrahimi was both the biggest buyer and the biggest seller.

Farhad Ebrahimi purchased 2.25m shares over the year. The average price per share was US$188. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

First Solar is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

First Solar Insiders Bought Stock Recently

There has been significantly more insider buying, than selling, at First Solar, over the last three months. insider Farhad Ebrahimi spent US$349m on stock. But we did see insider Farhad Ebrahimi sell shares worth US$12m. 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. I reckon it's a good sign if insiders own a significant number of shares in the company. First Solar insiders own about US$1.4b worth of shares (which is 6.9% of the company). 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 First Solar Insider Transactions Indicate?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest First Solar insiders are well aligned, and quite possibly think the share price is too low. Nice! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - First Solar has 1 warning sign we think you should be aware of.

Of course First Solar may not be the best stock to buy. So you may wish to see this free collection of high quality 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.