NXDT

NexPoint Diversified Real Estate Trust ($NXDT) Insiders on 15-Month Buying Spree...April Bottom Saw $1M Investment

07/09/2025 03:29

NexPoint Diversified Real Estate Trust ($NXDT) insiders have been consistently purchasing shares for over a year, drawing significant attention. This small-cap REIT with a market capitalization of approximately $184 million specializes in diverse real estate investments and has recently expanded into Delaware Statutory Trust (DST) products in self-storage and hospitality sectors. Most notably, officer James Dondero demonstrated aggressive buying behavior, purchasing over 150,000 shares in June 2024 alone. From June 21-28, he executed consecutive large purchases with average prices ranging from $4.89-5.44. Interestingly, following this aggressive buying, the stock price rose to $5.80 by mid-July. Even more remarkable was another insider buying cluster in April 2025. Officer Dustin Norris purchased 354,000 shares over just two days (April 3 and 7) at an average price of $3.53, representing over $1 million in investment. This 'bottom buying' occurred when the stock had fallen to $3.30, and subsequently the price has gradually recovered to current levels around $4.80. Director Arthur Laffer's buying pattern is also intriguing. Known as a supply-side economics expert, he has consistently made small purchases from July 2024 through July 2025. His recent consecutive purchases in June-July 2025 suggest he sees additional upside potential from current price levels. The stock chart reveals interesting patterns. Following the June 2024 insider buying, shares rose approximately 25% through mid-July. After the massive April 2025 purchases, the stock has shown gradual upward momentum. The current price of $4.80 is similar to levels during the first buying cluster in June 2024. $NXDT's business expansion is also positive. The company launched Class A self-storage DST products in Maryland and Florida in June 2024, and introduced a Residence Inn hotel DST product in Salt Lake City, Utah in June 2025. DST products provide tax-deferred benefits through 1031 exchanges, allowing individual investors indirect access to commercial real estate. Additionally, the company filed for a $500 million mixed shelf registration with the SEC in July 2024, indicating plans for future business expansion through capital raising. However, there are considerations. Small-cap REITs typically have limited liquidity and higher volatility. Indeed, the stock surged to $6.70 in December 2024 before plummeting to $3.30 in March 2025, showing significant price swings. Interest rate sensitivity and cyclical nature of real estate markets must also be considered. Nevertheless, the consistent insider buying over 15 months sends a strong signal. James Dondero's purchases through The Dugaboy Investment Trust demonstrate confidence in the company's long-term prospects. Dustin Norris's massive purchases at price lows are particularly impressive. Key metrics to watch include DST product performance and additional launch plans, plus interest rate environment changes affecting real estate markets. If rate cuts materialize, REITs could benefit broadly. The current price of $4.80 approximates insiders' average purchase costs, suggesting limited downside risk.