While the insider activity isn’t as bullish for First Solar (FSLR) it’s important to remember that big insider buying is much more meaningful for a company than big insider selling because insiders sell for a number of reasons, all of which may not be an indication they are no longer bullish on their company.  Insiders buy big for one reason and one reason only.

When looking at insider selling, it’s also important to consider what % of the total holdings the insider is dumping.  While the total amount of insider selling can be large, many of these insiders have 100’s of thousands if not millions of shares.  So let’s take a look at the activity in First Solar (FSLR).

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CEO Michael Ahearn as well as the John Walton Trust (yes that Walton family) have been dumping shares here and there for a long time and it’s safe to say they aren’t hurting for cash.  What’s most alarming about the past week or so and in the month of March is that the amount of insider selling has really spiked. 

Michael Ahearn has dumped over $100 million in stock in just the past month.  That’s in addition to 10’s of millions in stock dumped by the Walton Family Trust.  However, lets keep it in perspective.   The number of shares sold represent a fraction of their total shares and both Ahearn and the Walton family still own around a million shares. 

Technically, shares of FSLR have absorbed the selling quite well and the stock remains in a bullish pattern on the daily chart, continuing to trade above the 200 day moving average.  I personally won’t make a sell decision based on this insider selling, but rather on the technical action.  If the stock breaks the 200 day moving average with volume around the $140 level (it trades at $150 now), then that’s the exit signal.