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NHI: Insiders vs. Shorts
Monday, February 26, 2:18 PM ET, by Market News Video Staff

The most recent short interest data was recently released for the 01/31/2018 settlement date, and ...

Top Buys by Top Brass: CEO and President Mendelsohn's $130.9K Bet on NHI
Tuesday, February 27, 12:37 PM ET, by Market News Video Staff

A company's own top management tend to have the best inside view into the business, ...

Insiders Buy the Holdings of DHS ETF
Friday, March 2, 9:34 AM ET, by Market News Video Staff

A look at the weighted underlying holdings of the WisdomTree U.S. High Dividend Fund (DHS) ...

Bargain Hunters Take Note: Insider Cluster-Buying At NHI
Wednesday, March 14, 1:50 PM ET, by Market News Video Staff

A particularly strong insider buying signal is what we call a "cluster-buy" where three or ...

National Health Investors Named Top Dividend Stock With Insider Buying and 5.89% Yield (NHI)
Thursday, April 5, 2:08 PM ET, by Market News Video Staff

In this series, we look through the most recent Dividend Channel ''DividendRank'' report, and then ...

NHI: Insiders vs. Shorts

By Market News Video Staff, Monday, February 26, 2:18 PM ET
Play Video: What Short Interest Means


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The most recent short interest data was recently released for the 01/31/2018 settlement date, and National Health Investors, Inc. (NYSE:NHI) is one of the most shorted stocks of the Russell 3000, based on 4.73 "days to cover" versus the median component at 4.26. There are a number of ways to look at short data, but one metric that we find particularly useful is the "days to cover" because it considers both the total shares short and the average daily volume of shares typically traded. The number of shares short is then divided by the average daily volume, to express the total number of trading days it would take to close out all of the open short positions if every share traded represented a short position being closed.

In the case of National Health Investors, Inc. (NYSE:NHI), the total short interest at the 01/31/2018 settlement date was 1,164,299 shares, which compares to the average daily trading volume of just 246,258 shares, for a "days to cover" ratio of 4.73.

When short sellers eventually cover their positions, by definition there must be buying activity because a share that is currently sold short must be purchased to be covered. At the present levels of short interest, if from this point forward every single NHI share traded represented a short position being closed, then at the average daily volume of 246,258 shares it would only be during the 5th trading day that every short position would be closed.

So it would stand to reason that should some unexpectedly good news come out, and short sellers did not have 5 days of patience but instead wanted to cover their short positions very suddenly, that situation could result in sending the stock higher until the higher price produces enough sellers to generate the necessary volume to close out those positions quickly.

National Health Investors, Inc. (NYSE:NHI) has something relatively rare for a stock with this much short interest, that being insiders taking the other side of the trade. Looking back over the trailing six month period, NHI has seen 3 different instances of insider buying, as summarized by the table below:

Purchased Insider Title Shares Price/Share Value
08/28/2017 Robert A. McCabe Jr. Director 259 $79.94 $20,704.46
11/29/2017 Robert A. McCabe Jr. Director 263 $78.23 $20,574.02
02/22/2018 John L. Spaid Exec. VP of Finance 500 $64.95 $32,475.00
02/22/2018 D. Eric Mendelsohn CEO and President 2,000 $65.47 $130,948.00

Below is a chart showing the "days to cover" for NHI over time:

And looking at the chart below, NHI's low point in its 52 week range is $62.7135 per share, with $81.60 as the 52 week high point that compares with a last trade of $65.95.

National Health Investors, Inc. Moving Averages Chart

In recent trading, shares of National Health Investors, Inc. (NYSE:NHI) were changing hands at $65.95/share.


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