Several Insiders Invested In NexPoint Diversified Real Estate Trust Flagging Positive News
Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of NexPoint Diversified Real Estate Trust (NYSE:NXDT), it sends a favourable message to the company's shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for NexPoint Diversified Real Estate Trust
NexPoint Diversified Real Estate Trust Insider Transactions Over The Last Year
The Independent Director Catherine Wood made the biggest insider purchase in the last 12 months. That single transaction was for US$147k worth of shares at a price of US$11.78 each. That means that even when the share price was higher than US$8.26 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. 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.
Over the last year, we can see that insiders have bought 21.41k shares worth US$248k. But they sold 1.13k shares for US$12k. In total, NexPoint Diversified Real Estate Trust insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
NexPoint Diversified Real Estate Trust 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.
Insider Ownership
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that NexPoint Diversified Real Estate Trust insiders own 14% of the company, worth about US$43m. 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 NexPoint Diversified Real Estate Trust Insider Transactions Indicate?
It doesn't really mean much that no insider has traded NexPoint Diversified Real Estate Trust shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in NexPoint Diversified Real Estate Trust and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing NexPoint Diversified Real Estate Trust. Case in point: We've spotted 2 warning signs for NexPoint Diversified Real Estate Trust you should be aware of.
Of course NexPoint Diversified Real Estate Trust may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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 of direct interests only, but not derivative transactions or indirect interests.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
