Machina Capital Buys $990,000 First Solar Stake as Targets Fall

Machina Capital S.A.S. bought a new stake in First Solar, Inc. (NASDAQ:FSLR) during the third quarter, acquiring 5,651 shares valued at approximately $990,000, according to its most recent 13F filing with the Securities and Exchange Commission. The purchase lands at a moment when the solar cell manufacturer's shares trade far below their one-year high, and when Wall Street has been trimming its expectations.

Which funds joined the register?

Machina Capital was not alone. A cluster of smaller institutional buyers opened positions across the second and third quarters:

• Gen Wealth Partners Inc. bought a new stake in the third quarter worth approximately $30,000.
• Toth Financial Advisory Corp. acquired a new stake in the third quarter worth $32,000.
• Clearstead Trust LLC acquired a new stake in the second quarter worth $34,000.
• Vega Investment Solutions bought a new position in the second quarter worth about $40,000.
• Rakuten Securities Inc. bought a new stake in the second quarter valued at about $44,000.

Institutional investors and hedge funds together own 92.08% of the stock. That figure anchors the ownership picture. The takeaway: money keeps arriving at First Solar, even in modest sums.

What do the price numbers show?

NASDAQ:FSLR opened at $172.30 on Friday. The company carries a market cap of $18.52 billion, a P/E ratio of 9.97, a P/E/G ratio of 0.48 and a beta of 1.73.

The moving averages tell a harder story. The fifty-day moving average price stands at $185.28; the two-hundred-day moving average price at $213.73. The stock has touched a one-year low of $165.86 and a one-year high of $320.95. Shares now sit near the bottom of that range, roughly 46% below the peak.

How did the latest quarter land?

First Solar issued its quarterly earnings results on Thursday, October 29th. The solar cell manufacturer reported $5.30 EPS for the quarter, beating analysts' consensus estimates of $4.67 by $0.63. A year earlier, the business earned $4.24 per share.

Revenue told a different story. The quarter brought in $1.23 billion against analysts' expectations of $1.29 billion, and revenue fell 22.8% on a year-over-year basis. Profitability stayed firm: a net margin of 37.12% and return on equity of 18.33%. On average, analysts expect First Solar to post 17.70 earnings per share for the current fiscal year. Margins remain the story here.

What are insiders doing?

CTO Markus Gloeckler sold 800 shares on Thursday, October 1st, at an average price of $174.00, for a total transaction of $139,200.00. Following the sale, the chief technology officer owned 5,042 shares valued at $877,308 — a 13.69% decrease in his position. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan and disclosed in an SEC filing.

EVP Samantha L. Sloan sold 127 shares on Monday, August 17th, at an average price of $222.95, for a total value of $28,314.65. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Following it, the executive vice president directly owned 2,018 shares valued at $449,913.10, a 5.92% decrease in her position.

In total, insiders sold 1,727 shares worth $327,515 in the last 90 days. Company insiders own 0.39% of the stock. Both sales carried routine explanations.

How did analysts respond?

Several research houses cut their targets after the October 29th report, all in notes dated Friday, October 30th:

• Royal Bank of Canada lowered its target from $236.00 to $232.00 and kept an "outperform" rating.
• Needham & Company LLC dropped its target from $303.00 to $236.00 and set a "buy" rating.
• Susquehanna restated a "positive" rating with a $246.00 price target.
• Wells Fargo & Company cut its objective from $313.00 to $260.00 and set an "overweight" rating.
• Mizuho set a $328.00 price objective on Monday, November 2nd.

Three research analysts rate the stock Strong Buy, twenty-four rate it Buy, eight Hold and two Sell. According to MarketBeat.com, FSLR carries a consensus rating of "Moderate Buy" and a consensus price target of $255.00. That target sits well above the current price.

What is First Solar?

First Solar, Inc. is a U.S.-based solar technology company founded in 1999 that designs and manufactures photovoltaic modules for utility-scale solar power projects. Its products use thin-film cadmium telluride (CdTe) technology, an alternative to the crystalline-silicon cells common in solar panels. The company also provides services related to its modules, including recycling designed to recover and reuse materials at the end of a product's useful life. It serves customers across the Americas, Europe and Asia-Pacific.

The picture in plain words: new institutional money is arriving, earnings beat while revenue misses, and analysts still see value in the shares.