NexPoint Diversified Rallies As Other REITs Sell Off

It’s tiny for a REIT, with a market cap of just $615 million (compared, for example to Realty Income’s market cap of $41 billion), and the average daily volume is low at just 139,000 shares (compared to Realty’s 4.5 million shares).

NexPoint Diversified Real Estate Trust NXDT, nonetheless, keeps going higher while the majors keep going lower. Take a look at the daily price chart:

Just to be clear, that’s an up move from $12.80 early this year to the current price of $16.56 per share, for a half-year gain of about 23%. This comes at a time when the much bigger, well-known REIT names have been steadily trending downward.

One of the reasons for the strength may be the amount of insider buying going on with NexPoint Diversified is being noticed.

The founder of NexPoint, James Dondero, has been buying shares in the REIT steadily since the beginning of the year.

Morgan Stanley MS has a 6% position in the company.

Of the 37.11 million shares outstanding, institutional ownership comes to 10.17%.

It’s a single-family rental and build-to-rent concept that investors may be finding valuable as interest rates rise and home buyers are priced out – so they rent instead.

The Dallas-based NexPoint Diversified pays a 3.65% dividend.

The company recently converted from a closed end fund to a REIT.

Read Next: This REIT You've Probably Never Heard of Has Paid a Dividend Above 8% For The Last 5 Years

Chart from StockCharts

Posted In: Alternative investmentsREITSmall CapReal Estate

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