Quite a few insiders have dramatically grown their holdings in FTC Solar, Inc. (NASDAQ:FTCI) over the past 12 months. An insider’s optimism about the company’s prospects is a positive sign.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
FTC Solar Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Chairman of the Board & Lead Independent Director Thurman Rodgers bought US$1.2m worth of shares at a price of US$3.34 per share. That means that an insider was happy to buy shares at above the current price of US$2.04. 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. 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.
In the last twelve months insiders purchased 419.40k shares for US$1.5m. On the other hand they divested 66.39k shares, for US$297k. In total, FTC Solar insiders bought more than they sold 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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.
FTC Solar Insiders Are Selling The Stock
Over the last three months, we’ve seen significant insider selling at FTC Solar. In total, insiders dumped US$297k 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.
Does FTC Solar Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. FTC Solar insiders own about US$102m worth of shares (which is 50% 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.
What Might The Insider Transactions At FTC Solar Tell Us?
Insiders sold FTC Solar shares recently, but they didn’t buy any. In contrast, they appear keener if you look at the last twelve months. And insider ownership remains quite considerable. So we’re happy to look past recent trading. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing FTC Solar. In terms of investment risks, we’ve identified 4 warning signs with FTC Solar and understanding these should be part of your investment process.
Of course FTC 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, 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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