Have NexPoint Residential Trust, Inc. (NYSE:NXRT) Insiders Been Selling Their Stock?

Simply Wall St
March 21, 2022
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Investors may wish to note that the Executive VP of Finance of NexPoint Residential Trust, Inc., Brian Mitts, recently netted US$88k from selling stock, receiving an average price of US$87.58. However we note that the sale only shrunk their holding by 1.3%.

See our latest analysis for NexPoint Residential Trust

The Last 12 Months Of Insider Transactions At NexPoint Residential Trust

Notably, that recent sale by Executive VP of Finance Brian Mitts was not the only time they sold NexPoint Residential Trust shares this year. Earlier in the year, they fetched US$62.16 per share in a -US$348k sale. So it's clear an insider wanted to take some cash off the table, even below the current price of US$87.75. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 7.7%of Brian Mitts's holding.

Brian Mitts divested 11.60k shares over the last 12 months at an average price of US$60.39. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

NYSE:NXRT Insider Trading Volume March 21st 2022

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. NexPoint Residential Trust insiders own about US$245m worth of shares (which is 11% 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 NexPoint Residential Trust Insiders?

An insider sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing NexPoint Residential Trust. To help with this, we've discovered 6 warning signs (2 are a bit unpleasant!) that you ought to be aware of before buying any shares in NexPoint Residential Trust.

Of course NexPoint Residential 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, but not derivative transactions.

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