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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 Midland States Bancorp, Inc. (NASDAQ:MSBI).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
The Last 12 Months Of Insider Transactions At Midland States Bancorp
Director R. Funderburg made the biggest insider sale in the last 12 months. That single transaction was for US$2.8m worth of shares at a price of US$32.61 each. While the sale doesn’t make us feel confident, we do note it was conducted at a price well above the current share price, which is US$24.06. So it is hard to draw any strong conclusion from it.
In the last twelve months insiders purchased 6.17k shares for US$148k. But insiders sold 259.82k shares worth US$8.0m. All up, insiders sold more shares in Midland States Bancorp than they bought, over the last year. The sellers received a price of around US$30.98, on average. We are not joyful about insider selling. But the selling was at much higher prices than the current share price (US$24.06), so it probably doesn’t tell us a lot about the value on offer today. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders at Midland States Bancorp Have Sold Stock Recently
We’ve seen more insider selling than insider buying at Midland States Bancorp recently. In that time, R. Funderburg dumped US$851k worth of shares. Meanwhile insiders bought US$124k worth. The share price has moved a bit recently, but it’s hard to argue that the selling is a positive.
Insider Ownership of Midland States Bancorp
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Midland States Bancorp insiders own about US$51m worth of shares. That equates to 9.0% of the company. 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 Does This Data Suggest About Midland States Bancorp Insiders?
The stark truth for Midland States Bancorp is that there has been more insider selling than insider buying in the last three months. Zooming out, the longer term picture doesn’t give us much comfort. While insiders do own shares, they don’t own a heap, and they have been selling. So we’d only buy after careful consideration. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
But note: Midland States Bancorp 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 firstname.lastname@example.org.