We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell National Health Investors, Inc. (NYSE:NHI), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
National Health Investors Insider Transactions Over The Last Year
The Chairman of the Board W. Adams made the biggest insider purchase in the last 12 months. That single transaction was for US$976k worth of shares at a price of US$36.16 each. Even though the purchase was made at a significantly lower price than the recent price (US$67.85), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn’t tell us much about how insiders feel about the current share price.
Happily, we note that in the last year insiders paid US$1.7m for 39.05k shares. On the other hand they divested 1.67k shares, for US$152k. Overall, National Health Investors insiders were net buyers during the last year. Their average price was about US$42.61. It is certainly positive to see that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today’s share price. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
National Health Investors is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
National Health Investors Insiders Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at National Health Investors. Specifically, Independent Director Robert Adams bought US$467k worth of shares in that time, and we didn’t record any sales whatsoever. This makes one think the business has some good points.
Insider Ownership of National Health Investors
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It’s great to see that National Health Investors insiders own 4.3% of the company, worth about US$129m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At National Health Investors Tell Us?
It’s certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about National Health Investors. Nice! In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing National Health Investors. Our analysis shows 3 warning signs for National Health Investors (2 are concerning!) and we strongly recommend you look at them before investing.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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This article by Simply Wall St is general in nature. 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.
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