Can Insider Buying Save Solar & Alt-Energy? (FSLR, WFR, LDK, JASO, ADM, AMSC, WPRT, GTAT)

While corporate insiders sell shares for all sorts of reasons, there is usually just one reason for insiders to buy: they think the stock price will rise. That belief typically lights a fire under other investors, and we’re seeing a small gain in shares of First Solar, Inc. (NASDAQ: FSLR). There’s also been some recent buying in a few other alt energy players, but the action is pretty thin.

First Solar reported yesterday that five of its executives purchased 5,500 shares on the open market at a total cost of around $500,000.  Shares of First Solar are up nearly 3% in the first half hour of trading this morning. Banging the drum seems to have worked.

The company that has generated the most insider buying is MEMC Electronic Materials Inc. (NYSE: WFR), where company executives purchased 450,000 shares earlier this month and have added another 100,000 since. Chinese solar makers don’t file SEC Forms 3 and 4, so it’s difficult to get information on companies like LDK Solar Inc. (NYSE: LDK) and JA Solar Holdings Co. Ltd. (NASDAQ: JASO), which have seen share prices crumble recently.

One big player in the ethanol industry, Archer Daniels Midland Co. (NYSE: ADM) reported purchases of nearly 10,000 shares last week by two company officers and one director. That’s pretty small potatoes for a company with an outstanding float of more than 637 million shares.

One of the largest investors in alt energy stocks has been Kevin Douglas, who is not exactly an insider, but who has been piling into two alt energy companies specifically in the past two years. One is American Superconductor Corp. (NASDAQ: AMSC), where Douglas has amassed a stake of nearly 23% in the company, much of it since the beginning of 2011. Douglas also bought up about the same amount of stock in Westport Innovations Inc. (NASDAQ: WPRT) in 2010, a technology provider for alternative fuels and emissions controls on buses and trucks.

Most of Douglas’s purchases of AMSC stock came when the share price was about $20/share, compared with the current price of less than $6.50. His investment in Westport came when the shares were below $20/share, and shares are now trading around $23/share.

GT Advanced Technologies, Inc. (NASDAQ: GTAT), formerly GT Global International Inc., has arguably been the most successful alt energy stock this year, but it has now pulled back from highs above $17/share in early July. There’s been no insider buying, but if the price of the stock continues falling that could change.

Paul Ausick