Bullish J. Kumar Infraprojects Limited (NSE:JKIL) investors are yet to receive a pay off on their ₹92m bet

By
Simply Wall St
Published
February 25, 2022
NSEI:JKIL
Source: Shutterstock

Insiders who bought ₹92m worth of J. Kumar Infraprojects Limited's (NSE:JKIL) stock at an average buy price of ₹203 over the last year may be disappointed by the recent 11% decrease in the stock. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth ₹70m, which is not great.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for J. Kumar Infraprojects

J. Kumar Infraprojects Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Kusum Gupta for ₹40m worth of shares, at about ₹205 per share. That means that even when the share price was higher than ₹154 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

In the last twelve months J. Kumar Infraprojects insiders were buying shares, but not selling. 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
NSEI:JKIL Insider Trading Volume February 25th 2022

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

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. J. Kumar Infraprojects insiders own about ₹4.5b worth of shares. That equates to 39% 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.

What Might The Insider Transactions At J. Kumar Infraprojects Tell Us?

It doesn't really mean much that no insider has traded J. Kumar Infraprojects shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like J. Kumar Infraprojects insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing J. Kumar Infraprojects. While conducting our analysis, we found that J. Kumar Infraprojects has 1 warning sign and it would be unwise to ignore this.

But note: J. Kumar Infraprojects 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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