It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in MidWestOne Financial Group, Inc. (NASDAQ:MOFG).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
MidWestOne Financial Group Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Stephen West bought US$99k worth of shares at a price of US$33.02 per share. So it’s clear an insider wanted to buy, even at a higher price. Their view may have changed since then, but at least it shows they felt optimistic at the time. That purchase may suggest an expectation of positive returns over the long term.
Happily, we note that in the last year insiders paid US$318k for 9.75k shares. But they sold 4.50k for US$151k. In total, MidWestOne Financial Group insiders bought more than they sold over the last year. They paid about US$32.57 on average. This is nice to see since it implies that insiders might see value around current prices (around US$24.68). You can see a visual depiction of insider transactions over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
MidWestOne Financial Group Insiders Bought Stock Recently
There was some insider buying at MidWestOne Financial Group over the last quarter. Insiders purchased US$41k worth of shares in that period. It’s great to see that insiders are only buying, not selling. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
Insider Ownership of MidWestOne Financial Group
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. MidWestOne Financial Group insiders own about US$18m worth of shares (which is 5.8% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About MidWestOne Financial Group Insiders?
Our data shows a little more insider buying than selling in the last three months. But the difference isn’t much. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in MidWestOne Financial Group and their transactions don’t cause us concern. Of course, the future is what matters most. So if you are interested in MidWestOne Financial Group, you should check out this free report on analyst forecasts for the company.
But note: MidWestOne Financial Group may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.