Insider Challenge: First Solar, Evergreen Solar, and SunPower

With oil now commanding far more than $100 a barrel, solar technology companies are back in the headlines. Which one makes the most attractive buy now?

That's not an easy question to answer, but insider buying and selling can tell us a lot. With that in mind, here's a closer look at the insider action at three of America's top solar technology specialists: First Solar (Nasdaq: FLSR  ) , Evergreen Solar (Nasdaq: ESLR  ) , and SunPower (Nasdaq: SPWRA  ) (Nasdaq: SPWRB  ) .

Who's buying now?

Metric

First Solar

Evergreen Solar

SunPower

CAPS stars (out of 5) ** ** ***
Insider ownership 31.96% 0.80% 0.91%
Net buying (selling) over the past year ($196.6 million) ($59,807) $1.03 million
Last transaction David Eaglesham
Chief Tech. Officer
1,944 shares, $146.93 ea.
March 4, 2011
Sold 75% of holdings
Michael El Hillow
President and CEO
660 shares, $1.27 each
March 18, 2011
Sold < 1% of holdings
Betsy Atkins
Director
4,252 shares, $13.74 ea.
Dec. 14, 2010
Sold 100% of holdings

Sources: Motley Fool CAPS, Capital IQ, and Form 4 Oracle.

Looking at this table, I'd say First Solar has by far the worst insider profile, despite heavy insider ownership. Who cares how much executives own if most the decisions are sales?

To be fair, insiders have done most of their selling via 10b5-1 plans, which give them no control over the timing of transactions. And many of the open-market sales were conducted not by an insider, but a strategic owner: the estate of John T. Walton, son of Wal-Mart founder Sam Walton.

Evergreen gets a passing grade, since virtually all executive selling over the past year was done for the purpose of covering taxes on vested shares. In this sense, insiders are selling only what they have to, and nothing more. That's a good sign.

But SunPower gets the top grade among Fools. Smart. Twice since February, the stock has popped more than 10% in a day, and it's up 24% year to date versus a 4% gain for the S&P 500, validating my Foolish colleague Alyce Lomax's thesis for adding the stock to her Rising Stars portfolio in January.

With a 0.29 PEG ratio, I can see why she still likes the stock, and why, of the three stocks profiled above, only SunPower has attracted net buying interest among board members, executives, and strategic owners.

Do you agree? Disagree? Let us know which solar stock you'd buy using the comments box below. You can also rate any of these stocks in Motley Fool CAPS.

The Motley Fool recently introduced a free My Watchlist feature that allows users to stay ahead of the curve, receiving up-to-date news on companies like First Solar, Evergreen Solar, and SunPower. To get the latest updates and analysis on these and other stocks, add them to your watchlist today:

First Solar is a Motley Fool Rule Breakers recommendation. Our Motley Fool Inside Value, Motley Fool Global Gains, and Motley Fool Income Investor services have advised purchasing shares of Wal-Mart. Motley Fool Options has recommended creating a diagonal call position in Wal-Mart. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the Rule Breakers stock-picking team. He didn't own shares in any of the companies mentioned in this story at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool owns shares of Wal-Mart and is also on Twitter as @TheMotleyFool. Its disclosure policy would prefer to be on a sun-soaked beach about now.


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