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Jumbo (ASX:JIN) share price drops 8% – time to buy in?

The Jumbo Interactive Ltd (ASX: JIN) share price dropped 8% on Wednesday despite no news hitting the market.

Does this present a timely opportunity to purchase Jumbo shares?

JIN share price chart

Source: Rask Media JIN 1-year share price chart

About Jumbo Interactive

Founded by current CEO Mike Veverka in 1996, Jumbo has become the leading digital reseller of official government and charitable lotteries.

Since 1996, Jumbo has experienced stellar growth, with the company now having more than 2 million customer accounts and employing more than 100 people.

The company’s Oz Lotteries technology-driven platform supports the processing of more than $150 million in ticket sales each year across lotteries such as Oz Lotto and Powerball.

Shareholder alignment

Jumbo’s founder Mike Veverka has remained a major shareholder in the business since its founding.

As it stands, Mike is Jumbo’s largest shareholder. His holdings were last published on 24 November 2020, when it was disclosed he held an interest in 9.5 million Jumbo shares currently valued at a cool $134.6 million.

With such substantial ‘skin in the game’, investors can rest assured that Mike has a deep interest in creating shareholder value.

My view on Jumbo shares

I think Jumbo is a solid business which will continue to prosper, driven by a growing proportion of Australians buying lottery tickets online, as opposed to purchasing in-store. COVID-19 has likely served as a catalyst for this transition, with many consumers now preferring to shop from the comfort and relative safety of their home.

At the time of writing, Jumbo shares trade on a trailing dividend yield of 2.51%. In my view, this appears to be reasonably attractive in the current low interest rate environment. In comparison, a 12-month term deposit from Commonwealth Bank of Australia (ASX: CBA) will only pay you 0.55%.

For other ASX share ideas, click here.

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At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.

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