Matt McGraner, Chief Investment Officer at Nexpoint Real Estate Finance (NREF), recently added 5,000 shares. The buy increased his holdings by 5 percent, and came to a total cost of just over $84,000.
Insiders have been regular and steady buyers of shares over the past two years, with no insider sales over the same time. The buyers also include the company General Council, and the company President as well as directors.
Overall, insiders own about 4.9 percent of the mortgage lender REIT.
The stock is down about in-line with the overall market in the past year. There may be further price pressure as interest rates continue to rise.
However, shares already trade at a 30 percent discount to their book value, and the stock goes for about 10 times earnings, in addition to having a fat 48 percent profit margin.
Action to take: Investors may like shares for the long haul. As a REIT, the company pays out a high dividend of 12 percent at current prices. Investors may want to look for an opportunity to buy at a lower price as interest rates continue to rise this year.
For traders, the May $15 puts play well to the downtrend under way in shares. Last going for about $0.85, the trade can likely deliver mid-double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.