Investors who take an interest in NexPoint Diversified Real Estate Trust (NYSE:NXDT) should definitely note that the Executive Vice President, Dustin Norris, recently paid US$4.73 per share to buy US$300k worth of the stock. We reckon that's a good sign, especially since the purchase boosted their holding by 78%.

NexPoint Diversified Real Estate Trust Insider Transactions Over The Last Year

In fact, the recent purchase by Dustin Norris was the biggest purchase of NexPoint Diversified Real Estate Trust shares made by an insider individual in the last twelve months, according to our records. That implies that an insider found the current price of US$5.10 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider purchases were made at close to current prices.

In the last twelve months insiders purchased 173.22k shares for US$887k. 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 the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

NexPoint Diversified Real Estate Trust is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of NexPoint Diversified Real Estate Trust

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. NexPoint Diversified Real Estate Trust insiders own about US$27m worth of shares. That equates to 14% of the company. 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's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Insiders likely see value in NexPoint Diversified Real Estate Trust shares, given these transactions (along with notable insider ownership of the company). So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 3 warning signs for NexPoint Diversified Real Estate Trust you should be aware of, and 2 of these are significant.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com