SolarEdge Technologies, Inc. (NASDAQ:SEDG) insiders may have anticipated weakness, ditched US$24m worth of stock even though prices were low

By
Simply Wall St
Published
September 08, 2021
NasdaqGS:SEDG
Source: Shutterstock

Even though SolarEdge Technologies, Inc. (NASDAQ:SEDG) has fallen by 3.8% over the past week , insiders who sold US$24m worth of stock over the past year have had less luck. The average selling price of US$278 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for SolarEdge Technologies

SolarEdge Technologies Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Independent Director, Avery More, sold US$6.2m worth of shares at a price of US$253 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$279. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 30% of Avery More's holding.

SolarEdge Technologies insiders didn't buy any shares over the last year. 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!

insider-trading-volume
NasdaqGS:SEDG Insider Trading Volume September 8th 2021

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

Insider Ownership

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. SolarEdge Technologies insiders own 1.5% of the company, currently worth about US$225m 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 SolarEdge Technologies Insider Transactions Indicate?

It doesn't really mean much that no insider has traded SolarEdge Technologies shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the SolarEdge Technologies insiders selling. 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. For example, SolarEdge Technologies has 3 warning signs (and 2 which make us uncomfortable) we think you should know about.

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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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.
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