Insiders Of NexPoint Diversified Real Estate Trust Reap Rewards After Their Investment Jumps Another US$254k

Last week, NexPoint Diversified Real Estate Trust (NYSE:NXDT) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 12% last week, resulting in a US$25m increase in the company's market worth, implying a 16% gain on their initial purchase. As a result, their original purchase of US$1.56m worth of stock is now worth US$1.81m.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for NexPoint Diversified Real Estate Trust

The Last 12 Months Of Insider Transactions At NexPoint Diversified Real Estate Trust

In the last twelve months, the biggest single purchase by an insider was when Chairman & President James Dondero bought US$313k worth of shares at a price of US$5.09 per share. Even though the purchase was made at a significantly lower price than the recent price (US$5.97), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

While NexPoint Diversified Real Estate Trust insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Does NexPoint Diversified Real Estate Trust Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 15% of NexPoint Diversified Real Estate Trust shares, worth about US$36m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At NexPoint Diversified Real Estate Trust Tell Us?

The fact that there have been no NexPoint Diversified Real Estate Trust insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in NexPoint Diversified Real Estate Trust and we see no evidence to suggest they are worried about the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing NexPoint Diversified Real Estate Trust. To that end, you should learn about the 3 warning signs we've spotted with NexPoint Diversified Real Estate Trust (including 2 which 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.

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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.