Independent Director of MGP Ingredients Martin Roper Buys 472% More Shares

Investors who take an interest in MGP Ingredients, Inc. (NASDAQ:MGPI) should definitely note that the Independent Director, Martin Roper, recently paid US$33.10 per share to buy US$497k worth of the stock. We reckon that's a good sign, especially since the purchase boosted their holding by 472%.

Our free stock report includes 3 warning signs investors should be aware of before investing in MGP Ingredients. Read for free now.

MGP Ingredients Insider Transactions Over The Last Year

The Chairman, Donn Lux, made the biggest insider sale in the last 12 months. That single transaction was for US$3.2m worth of shares at a price of US$32.35 each. That means that even when the share price was slightly below the current price of US$32.89, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 3.8% of Donn Lux's stake.

In total, MGP Ingredients insiders sold more than they bought over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

Check out our latest analysis for MGP Ingredients

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Does MGP Ingredients Boast High Insider Ownership?

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. It's great to see that MGP Ingredients insiders own 25% of the company, worth about US$175m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At MGP Ingredients Tell Us?

Unfortunately, there has been more insider selling of MGP Ingredients stock, than buying, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing MGP Ingredients. Every company has risks, and we've spotted 3 warning signs for MGP Ingredients you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

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 of direct interests only, but not derivative transactions or indirect interests.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.