As Jindalee Resources Limited (ASX:JRL) hits AU$198m market cap, insiders may be dismayed about not purchasing higher quantities

By
Simply Wall St
Published
August 26, 2021
ASX:JRL
Source: Shutterstock

Insiders who bought Jindalee Resources Limited (ASX:JRL) stock in the last 12 months were richly rewarded last week. The company's market value increased by AU$20m as a result of the stock's 11% gain over the same period. As a result, the stock they originally bought for AU$557k is now worth AU$4.8m.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Jindalee Resources

Jindalee Resources Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Mark Scott bought AU$380k worth of shares at a price of AU$0.38 per share. We do like to see buying, but this purchase was made at well below the current price of AU$3.70. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

In the last twelve months insiders purchased 1.30m shares for AU$557k. But they sold 9.69k shares for AU$24k. Overall, Jindalee Resources insiders were net buyers during the last year. They paid about AU$0.43 on average. To my mind it is good that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
ASX:JRL Insider Trading Volume August 27th 2021

Jindalee Resources is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insiders at Jindalee Resources Have Bought Stock Recently

We saw some Jindalee Resources insider buying shares in the last three months. Executive Director Lindsay Dudfield bought AU$50k worth in that time. On the other hand, Independent Non-Executive Chairman Justin Mannolini sold AU$24k worth of shares. It is good to see that insiders have been buying, but they did not buy very many shares, in the scheme of things.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Jindalee Resources insiders own about AU$64m worth of shares. That equates to 33% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Jindalee Resources Insider Transactions Indicate?

We note a that there has been a bit of insider buying recently (but no selling). The net investment is not enough to encourage us much. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Jindalee Resources and their transactions don't cause us concern. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To help with this, we've discovered 3 warning signs (1 is potentially serious!) that you ought to be aware of before buying any shares in Jindalee Resources.

But note: Jindalee Resources 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, but not derivative transactions.

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