The Jumbo Interactive Ltd (ASX: JIN) share price is under pressure again on Tuesday.
This morning the online lottery ticket seller's shares continued their slide and dropped 2% to $14.34.
This latest decline means that Jumbo's shares have now lost almost half of their value since peaking at $27.92 in October.
Jumbo sell off.
Jumbo's shares have fallen heavily since the release of its underwhelming guidance for the first half of FY 2020.
That update revealed that it expects to deliver total transaction value (TTV) of $187.6 million and revenue of $37.8 million in the first half. This will be a 27% and 24% increase, respectively, on the prior corresponding period.
Whilst this is solid growth, it was its bottom line growth that spooked investors. After becoming accustomed to its profits growing quicker than sales, investors were shocked to learn that its first half profit is due to come in at $14.3 million. This will be growth of just 13% on the prior corresponding period.
Management blamed this slower growth on increased business development activity. It expects this to be temporary and advised that its EBITDA margins should return to normal in FY 2021.
Insider buying.
A number of the company's directors have taken advantage of this sell off to top of their holdings.
According to a series of change of director's interest notices, three of its directors have bought shares through on-market trades this week.
Non-executive director Sharon Christensen picked up 1,050 shares for $15,100 over December 23 and 24. Fellow non-executive director William Lyne snapped up 1,000 shares for $15,280 on December 23. And chairman David Barwick also grabbed 1,000 shares but for $15,500 on December 23.
Whilst I felt its market update was very disappointing, this sell off does appear to have been overdone. As a result, I think it could be worth following the lead of these insiders and buying shares. I would also suggest investors consider fellow gaming company Aristocrat Leisure Limited (ASX: ALL).
