NXDT

Father of Laffer Curve Keeps Buying: $NXDT Insiders Send Strong Signals

07/11/2025 10:06

Insiders at NexPoint Diversified Real Estate Trust ($NXDT) are sending strong signals that investors should pay attention to. This real estate investment trust (REIT) is a small-cap company with a market capitalization of $184 million, focusing on providing stable returns to investors through a diversified real estate portfolio. The most striking pattern is the consistent insider buying activity by executives and directors. Since June 2024, there have been over 30 insider purchase transactions with zero sales. Notably, Officer James Dondero made large-scale purchases totaling approximately $1.5 million through the end of June 2024, while Officer Dustin Norris invested over $1 million in company shares. What makes this particularly interesting is the consistent buying by Director Arthur Laffer, a renowned economist known as the father of supply-side economics. Laffer, famous for the 'Laffer Curve' in the 1970s and a key architect of the Reagan administration's tax-cutting policies, has been steadily purchasing $NXDT shares across 10 transactions from July 2024 to July 2025. When such a distinguished economist continues buying, it suggests confidence that goes beyond mere financial investment. The stock chart validates the insiders' judgment. Starting at $4.70 in early June 2024, the share price rose to $5.80 by mid-July following the large-scale insider purchases, and reached a high of $6.70 in December. This represents over 40% returns from the initial insider buying levels. While the stock has corrected in 2025 and currently trades around $4.60-4.80, insiders continue showing buying interest. Arthur Laffer's persistent purchases from April through July 2025 suggest he views current price levels as undervalued. From a business perspective, positive developments are emerging. The company launched a DST (Delaware Statutory Trust) offering in June 2024 featuring Class-A self-storage properties in Maryland and Florida, and introduced a lodging DST product in June 2025 targeting the Residence Inn Salt Lake City. This demonstrates the company's expansion into diverse real estate sectors. More notably, the company filed for a mixed shelf offering of up to $500 million with the SEC in July 2024. For a company with a $184 million market cap, this represents a significant capital raising plan, potentially preparing for major investments or acquisitions. Currently, $NXDT presents an intriguing investment opportunity. With the stock down over 30% from its 2024 highs while insiders continue buying, this creates a compelling signal. Arthur Laffer's consistent purchases, given his stature as an economic authority, suggest confidence in both the company's fundamentals and real estate market outlook. REIT sectors are sensitive to interest rate fluctuations, requiring caution in the current uncertain rate environment. However, considering the consistent insider buying signals and the company's business expansion plans, $NXDT appears worthy of consideration for medium to long-term investment.