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Insiders who bought MGP Ingredients, Inc. (NASDAQ:MGPI) in the last 12 months may probably not pay attention to the stock's recent 4.6% drop. After accounting for the recent loss, the US$2.9m worth of shares they purchased is now worth US$3.3m, suggesting a good return on their investment.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for MGP Ingredients
MGP Ingredients Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Director Donn Lux for US$841k worth of shares, at about US$86.18 per share. Even though the purchase was made at a significantly lower price than the recent price (US$106), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
Over the last year, we can see that insiders have bought 31.00k shares worth US$2.9m. But insiders sold 10.49k shares worth US$808k. In the last twelve months there was more buying than selling by MGP Ingredients insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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).
Insiders At MGP Ingredients Have Bought Stock Recently
Over the last quarter, MGP Ingredients insiders have spent a meaningful amount on shares. Specifically, Director Donn Lux bought US$1.6m worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company 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. MGP Ingredients insiders own 20% of the company, currently worth about US$458m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The MGP Ingredients Insider Transactions Indicate?
It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. Once you factor in the high insider ownership, it certainly seems like insiders are positive about MGP Ingredients. That's what I like to see! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 1 warning sign for MGP Ingredients you should be aware of.