Insiders who placed huge bets on Jupiter Mines Limited (ASX:JMS) earlier this year would be disappointed with the 11% drop

Insiders who bought AU$6.4m worth of Jupiter Mines Limited's (ASX:JMS) stock at an average buy price of AU$0.28 over the last year may be disappointed by the recent 11% decrease in the stock. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only AU$4.9m.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Jupiter Mines

Jupiter Mines Insider Transactions Over The Last Year

The insider Brian Gilbertson made the biggest insider purchase in the last 12 months. That single transaction was for AU$2.7m worth of shares at a price of AU$0.27 each. That means that an insider was happy to buy shares at above the current price of AU$0.21. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

Jupiter Mines insiders may have bought shares in the last year, but they didn't sell any. 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!

Jupiter Mines is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insiders at Jupiter Mines Have Bought Stock Recently

It's good to see that Jupiter Mines insiders have made notable investments in the company's shares. We can see that Chief Executive Officer Priyank Thapliyal paid AU$385k for shares in the company. No-one sold. That shows some optimism about the company's future.

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. Insiders own 5.5% of Jupiter Mines shares, worth about AU$25m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Jupiter Mines Insiders?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. Insiders likely see value in Jupiter Mines shares, given these transactions (along with notable insider ownership of the company). So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 3 warning signs with Jupiter Mines and understanding these should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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, but not derivative transactions.

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.

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