We'd be surprised if MGP Ingredients, Inc. (NASDAQ:MGPI) shareholders haven't noticed that the Independent Director, Lori Mingus, recently sold US$251k worth of stock at US$90.88 per share. However, the silver lining is that the sale only reduced their total holding by 5.8%, so we're hesitant to read anything much into it, on its own.

MGP Ingredients Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Director, Donn Lux, for US$2.8m worth of shares, at about US$83.56 per share. That means that an insider was selling shares at slightly below the current price (US$90.35). 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. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 1.3% of Donn Lux's holding.

Happily, we note that in the last year insiders paid US$149k for 1.75k shares. On the other hand they divested 105.97k shares, for US$9.6m. Over the last year we saw more insider selling of MGP Ingredients shares, than buying. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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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. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that MGP Ingredients insiders own 23% of the company, worth about US$460m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The MGP Ingredients Insider Transactions Indicate?

An insider hasn't bought MGP Ingredients stock in the last three months, but there was some selling. 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. While it's good to be aware of 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. You'd be interested to know, that we found 2 warning signs for MGP Ingredients and we suggest you have a look.

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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.

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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.