We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in MidWestOne Financial Group, Inc. (NASDAQ:MOFG).
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
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.
The Last 12 Months Of Insider Transactions At MidWestOne Financial Group
In the last twelve months, the biggest single sale by an insider was when the Director, Kurt Weise, sold US$66k worth of shares at a price of US$33.28 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$20.08). So it is hard to draw any strong conclusion from it.
Happily, we note that in the last year insiders paid US$278k for 10.16k shares. But they sold 5675 shares for US$176k. In total, MidWestOne Financial Group insiders bought more than they sold over the last year. They paid about US$27.40 on average. I'd consider this a positive as it suggests insiders see value at around the current price. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
MidWestOne Financial Group Insiders Bought Stock Recently
Over the last three months, we've seen significantly more insider buying, than insider selling, at MidWestOne Financial Group. In fact, five insiders bought US$172k worth of shares. But we did see Director Kurt Weise sell shares worth US$66k. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.
Insider Ownership of MidWestOne Financial Group
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 8.1% of MidWestOne Financial Group shares, worth about US$27m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The MidWestOne Financial Group Insider Transactions Indicate?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. Given that insiders also own a fair bit of MidWestOne Financial Group we think they are probably pretty confident of a bright future. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. At Simply Wall St, we found 2 warning signs for MidWestOne Financial Group that deserve your attention before buying any shares.
Of course MidWestOne Financial Group may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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