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We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell National Health Investors, Inc. (NYSE:NHI), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
National Health Investors Insider Transactions Over The Last Year
Kristin Gaines made the biggest insider sale in the last 12 months. That single transaction was for US$861k worth of shares at a price of US$80.92 each. So it’s clear an insider wanted to take some cash off the table, even below the current price of US$83.26. While their view may have changed since they sold, this isn’t a particularly bullish sign. When an insider sells below the current price, it does tend to make us wonder about the current valuation. Please note, however, that this single sale was just 21.8% of Kristin Gaines’s stake.
Happily, we note that in the last year insiders paid US$204k for 3.10k shares. But insiders sold 14.03k shares worth US$1.1m. In total, National Health Investors insiders sold more than they bought over the last year. The sellers received a price of around US$79.81, on average. It’s not particularly great to see insiders were selling shares at below recent prices. But we wouldn’t put too much weight on the insider selling. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
National Health Investors Insiders Are Selling The Stock
The last three months saw significant insider selling at National Health Investors. In total, insiders sold US$1.1m worth of shares in that time, and we didn’t record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership of National Health Investors
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. National Health Investors insiders own about US$127m worth of shares (which is 3.6% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About National Health Investors Insiders?
Insiders haven’t bought National Health Investors stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn’t bring confidence, either. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn’t make us feel confident about the company. Of course, the future is what matters most. So if you are interested in National Health Investors, you should check out this free report on analyst forecasts for the company.
Of course National Health Investors may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.