Although Midland States Bancorp, Inc. (NASDAQ:MSBI) shareholders have enjoyed a great week with the stock up 12%, insiders who sold stock over the past year haven't fared as well. They could have sold their shares at much higher prices and gotten a better return on their investment if they had waited.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Midland States Bancorp Insider Transactions Over The Last Year

In fact, the recent sale by Chief Accounting Officer & Corporate Controller Donald Spring was not their only sale of Midland States Bancorp shares this year. They previously made an even bigger sale of -US$147k worth of shares at a price of US$22.07 per share. That means that an insider was selling shares at slightly below the current price (US$27.96). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was 55% of Donald Spring's stake.

Over the last year, we can see that insiders have bought 3.29k shares worth US$74k. But insiders sold 10.60k shares worth US$237k. Donald Spring sold a total of 10.60k shares over the year at an average price of US$22.34. You can see the insider transactions (by companies and 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insiders At Midland States Bancorp Have Sold Stock Recently

Over the last three months, we've seen a bit of insider selling at Midland States Bancorp. Chief Accounting Officer & Corporate Controller Donald Spring only netted US$17k selling shares, in that period. Neither the lack of buying nor the presence of selling is heartening. But the selling simply isn't sufficiently substantial to be of much use as a signal.

Insider Ownership Of Midland States Bancorp

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 appears that Midland States Bancorp insiders own 5.0% of the company, worth about US$27m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Midland States Bancorp Insider Transactions Indicate?

While there has not been any insider buying in the last three months, there has been selling. But given the selling was modest, we're not worried. Recent sales exacerbate our caution arising from analysis of Midland States Bancorp insider transactions. But it's good to see that insiders own shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Midland States Bancorp. Case in point: We've spotted 1 warning sign for Midland States Bancorp you should be aware of.

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.

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.