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Those following along with National Health Investors, Inc. (NYSE:NHI) will no doubt be intrigued by the recent purchase of shares by W. Adams, Chairman of the Board of the company, who spent a stonking US$976k on stock at an average price of US$36.16. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 2.5%.
National Health Investors Insider Transactions Over The Last Year
Notably, that recent purchase by W. Adams is the biggest insider purchase of National Health Investors shares that we've seen in the last year. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$53.67. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
Over the last year, we can see that insiders have bought 31.62k shares worth US$1.2m. But insiders sold 4573 shares worth US$391k. Overall, National Health Investors insiders were net buyers last year. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insider Ownership of National Health Investors
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. National Health Investors insiders own about US$113m worth of shares (which is 4.7% 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 Do The National Health Investors Insider Transactions Indicate?
It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest National Health Investors insiders are well aligned, and quite possibly think the share price is too low. Nice! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 3 warning signs with National Health Investors and understanding them should be part of your investment process.
But note: National Health Investors 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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