NXDT

NexPoint($NXDT) Executives Signal Strong Confidence With $2.2 Million Buying Spree Following Stock Plunge

05/22/2025 22:13

Top executives at NexPoint Diversified Real Estate Trust ($NXDT) have executed significant share purchases totaling over $1 million in the past two months, drawing market attention. These concentrated buys, occurring as the stock approached 52-week lows, signal strong insider confidence in the company's underlying value. NXDT is a small-cap real estate investment trust with a market capitalization of approximately $185 million, operating a diversified portfolio across various real estate assets. While relatively small in the REIT market, the company has been seeking growth through expansion into the self-storage property sector. Following a stock price decline to $3.30 in early April, multiple NXDT executives initiated substantial purchases. The most notable transaction came from officer Dustin David Norris, who invested $1,059,000 to acquire 300,000 shares at $3.53 per share on April 7. During the same week, officer Paul Richards purchased a total of 67,000 shares (approximately $250,000) on April 3-4, while board member Arthur B. Laffer acquired 26,900 shares (about $87,000) on April 7. A week later, on April 8, officer James D. Dondero purchased 100,000 shares at $4.08 each, representing a $408,000 investment. Collectively, NXDT insiders acquired approximately $1.8 million worth of shares in the first week of April alone. Even more telling is the continuation of this buying trend into May. Dustin Norris purchased an additional 123,625 shares on May 20-21, representing approximately $430,000. This persistent pattern of acquisitions suggests insiders believe the current share price significantly undervalues the company. Footnotes in the insider trading disclosures reveal that some transactions occurred through complex ownership structures. James Dondero holds shares through The Dugaboy Investment Trust and some transactions were executed through UTMA (Uniform Transfer to Minors Act) accounts for his children. Arthur Laffer maintains indirect ownership through a limited liability company. NXDT's stock price, which exceeded $6.50 in late 2024, has experienced a sustained decline in 2025, falling to around $3.30 in early April—approximately 50% lower year-over-year. Following the concentrated insider buying in early April, the stock briefly rebounded to $3.90 before settling back to trade in the $3.40-$3.50 range by mid-May. These insider purchases appear connected to recent business expansions. Last June, NXDT announced the launch of a self-storage DST (Delaware Statutory Trust) offering featuring Class-A properties in Maryland and Florida. In July, the company filed with the SEC to issue mixed securities worth up to $500 million. These moves suggest the company is pursuing new growth opportunities. Among key insiders, Dustin Norris has purchased a total of 541,055 shares worth approximately $2 million over the past eight months. He is recognized in the industry as a real estate asset management specialist with a significant role within the NexPoint group. James Dondero, known as NexPoint's founder, has consistently purchased company shares over the past year. The U.S. real estate market currently faces uncertainty due to high interest rates and economic slowdown concerns. However, with the Federal Reserve hinting at possible rate cuts, interest in the REIT sector has been rekindling. In this context, the substantial insider buying at NXDT can be interpreted as confidence in the company's long-term value. While insider purchases don't always precede stock price increases, concentrated large-scale buying by multiple senior executives in a short timeframe is often considered a positive signal. In NXDT's case, the timing of these purchases—occurring after significant share price declines—makes them particularly noteworthy. Investors should monitor NXDT's insider buying patterns alongside upcoming earnings reports, asset acquisitions, and dividend policies. Particularly important will be understanding the strategic purpose behind the planned $500 million securities issuance and the performance outcomes from expansion into the self-storage property sector. As competition intensifies in the small-cap REIT sector, these strong buying signals from insiders suggest NXDT may possess long-term value creation potential despite the challenging market environment.

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