TRADE ALERT - Core Portfolio August 2026
We are buying more shares of National Health Investors (NHI) following its roughly 5% drop after second-quarter results. We bought another 50 shares, expanding our position size by 10%:
We recently initiated our position because NHI has become a much more attractive senior housing REIT following its recent transformation.
The company sold its NHC portfolio for $560 million, substantially reducing skilled nursing exposure, removing a major governance overhang of having a related-party tenant, deleveraging its balance sheet, and freeing up hundreds of millions of dollars to reinvest into private-pay senior housing to become a quasi-pure-play senior housing REIT.
That is exactly where we want the company allocating capital.
Senior housing fundamentals remain exceptionally strong. Demand is accelerating as the population ages, while new construction remains historically low because of high interest rates and elevated construction costs.
This has driven huge gains for senior housing REITs such as Welltower (WELL), but their valuations have also expanded dramatically.
But NHI remains much cheaper.
It trades at 14.6x FFO and offers a dividend yield of around 5%, despite having very low leverage, improved governance, and rapidly increasing exposure to senior housing operating properties.
Following the latest results and conference call, our thesis remains intact.
We think the market is focusing too much on short-term weakness in a small legacy portion of the portfolio while overlooking the much bigger transformation underway.
