Eye on Insiders: First Solar

Watching insiders is like participating in a weeks-long stakeout. You expect something to happen, but you don't know what. So you settle in, sip your coffee, and wait for clues to solving the big case.

Here, the "case" is direction: Which way is your stock headed? The "clues" come in the form of insider buying and selling action. Have a look at First Solar (Nasdaq: FSLR  ) over the past year.

Insider Rating

Bullish
Only one open market sale over the past year, and at a price well above what the stock trades for currently.

Business Description

Developer of a popular thin-film semiconductor technology for solar panels.

Recent Price

$156.15

CAPS Stars (out of 5)

**

Percentage of Shares Owned by Insiders

23.03%

Net Buying (Selling)^

($917,922)

Last Buyer (% Increase)

None over the prior 12 months.

Last Seller (% Decrease)

Jens Meyerhoff, chief financial officer
5,000 shares at $183.58 apiece on May 1
(Sale represented 57% of direct holdings)

Competitors

Suntech Power (NYSE: STP  )
SunPower (Nasdaq: SPWRA  )
Yingli Green Energy (NYSE: YGE  )

CAPS Members Bullish on FSLR Also Bullish on

Apple (Nasdaq: AAPL  )

CAPS Members Bearish on FSLR Also Bearish on

Amazon (Nasdaq: AMZN  )
Research In Motion (Nasdaq: RIMM  )

Recent Foolish Coverage of FSLR

5 Stocks That Laugh at Wall Street
This Week in Solar
5 Words That Change Everything

Sources: Form 4 Oracle, Capital IQ, and Motley Fool CAPS. Data current as of Sept. 20.^Open market sales and purchases only.

What we're tracking here, and why
Insider buying data can be confusing. Here, I'm concentrating only on buying and selling conducted in the open market. With most of these transactions, insiders control the timing. Other times they're buying or selling under the purview of a 10b5-1 plan. Either way, personal holdings are being bought and sold.

Those personal holdings matter the most -- they're the shares executives hold for investment, rather than compensation. Employee stock options are different; they're compensatory in the purest sense. I've stripped out options-related buying and selling from the calculations you see above.

The Foolish view: bullish
Renewable energy is a promising but often confusing investing opportunity. Solar seems like an obvious, no-brainer winner. But if that's true, then why is oil/water tycoon T. Boone Pickens betting on wind?

Perhaps because the solar market suffered a brutal downturn last year and has yet to fully recover. First Solar, for its part, is now on its second CEO and mired in a "turf war," according to my Foolish colleague and solar expert, Toby Shute.

CAPS investors such as ArgusPanoptes don't like that sort of talk. Here's what this member wrote last week:

It's a hot potato isn't it? All that money rushing so fast ... into an industry where a small change could be the big difference. There are too many smart people with upcoming products, preparing to cut into the pie. Company will succeed in their vision, but the stock won't be the vision of the shareholders. The push into the physical reality of big solar will be slow and steady but mostly slow. I see some investors jumping ship soon to join smaller caps.

That call might have looked prescient had it been made last summer, when institutional holders were selling in bulk at north of $250 per share. Not so much today, when insiders have been selling either via options or on predetermined schedules, and at much higher prices than the stock trades for presently. The last executive to sell on the open market did so at a 17% premium to Friday's close. My guess is that executives will remain in a holding pattern until the share price sees at least a double-digit recovery.

But that's also just my take. Do you agree? Disagree? Log into CAPS today and tell us how you would rate First Solar.

And if you want me to take a Foolish peek at the insider action of your favorite stock, email me here or use the comments box below. I'll write this column as often as you, our readers, demand.

Get more of the inside scoop with related Foolishness:

First Solar and Suntech Power are Motley Fool Rule Breakers picks. Amazon and Apple are Motley Fool Stock Advisor selections. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers had stock and options positions in Apple at the time of publication. Check out his portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy has its eye on you.


Read/Post Comments (2) | Recommend This Article (8)

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  • Report this Comment On September 21, 2009, at 4:46 PM, phillyNewbie wrote:

    hey tim, nice insight :)

    I want to know such inside action on siemens.

    can you help me out?

    Thanks

  • Report this Comment On September 21, 2009, at 11:55 PM, QwertyHero wrote:

    SOLR and SNRY are better solar plays in my book. I'm thinking about dropping a couple large on a SOLR buy.

    I own a few piddly shares of SNRY - much more of a longshot but I like their mentality - they are the guy who made a fortune in California during the goldrush - not by mining for gold - but by selling all those idiots shovels - ya know what I mean?

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