With stock up 11%, Insiders of Jamna Auto Industries Limited (NSE:JAMNAAUTO) must be wishing they had bought more last year

By
Simply Wall St
Published
August 30, 2021
NSEI:JAMNAAUTO
Source: Shutterstock

Jamna Auto Industries Limited (NSE:JAMNAAUTO) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 11% resulting in a ₹3.5b addition to the company’s market value. As a result, the stock they originally bought for ₹6.3m is now worth ₹12m.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Jamna Auto Industries

Jamna Auto Industries Insider Transactions Over The Last Year

The MD, CEO & Executive Director Pradeep Jauhar made the biggest insider purchase in the last 12 months. That single transaction was for ₹6.3m worth of shares at a price of ₹48.53 each. We do like to see buying, but this purchase was made at well below the current price of ₹88.95. 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.

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!

insider-trading-volume
NSEI:JAMNAAUTO Insider Trading Volume August 31st 2021

Jamna Auto Industries 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.

Does Jamna Auto Industries 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 17% of Jamna Auto Industries shares, worth about ₹6.1b. 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 Jamna Auto Industries Insider Transactions Indicate?

The fact that there have been no Jamna Auto Industries insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like Jamna Auto Industries insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. While we like knowing 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. For example - Jamna Auto Industries has 1 warning sign we think you should be aware of.

But note: Jamna Auto Industries 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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