The NIB Holdings Limited (ASX: NHF) share price leapt into the green in early trade today. Shares in the health insurer started the session well, reaching a 52-week high of $7.97, before retracing back down.
The NIB share price is now changing hands at $7.72 apiece, a 0.52% walk into the green.
Let's examine the tailwinds behind the company of late.
What has NIB been up to lately?
On 20 July, NIB announced a restructuring of its board, appointing David Gordon as the new chair of its board. Gordon replaced Steve Crane, who officially stepped down on 29 July.
As a founding principal of Lexicon Partners and current chair of Accent Group Ltd (ASX: AX1), Gordon said he was "honoured and excited to assume the role".
In addition, NIB was a feature in the Prime Value Opportunities Fund June update, as reported by Motley Fool's Mitchell Lawler. The fund described NIB as "very attractive", considering a two or three-year holding period.
Prime provided a brief synopsis of its investment thesis on NIB in the update:
The consensus view is that profit margins are unsustainably high and it's better to own the health providers as elective surgeries, etc. return. We agree NHF's margins will fall but using long term, sustainable margins, the company is very attractively priced.
And in the meantime it generates very high cashflows, boosting the balance sheet. To us, fundamental underlying value is more important than short term earnings trends
Investor sentiment sets the tone
Doubtlessly, investor sentiment is bullish on NIB shares at the current standing. To illustrate, the NIB share price has reached new 52-week highs three times in the last month.
Further, on the charts, NIB shares have really taken off since the beginning of July. As much is observed on the chart below.
NIB share price vs broad index, March – August 2021
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This is called an "uptrend", where a share price makes consecutive new highs (and higher lows) as we walk through time.
Moreover, this display is further evidence of the bullish sentiment on NIB shares right now. The NIB share price has been in an uptrend since July, indicating there is investor demand to buy NIB shares.
With no market-sensitive information released today, it appears that the board restructuring, and in particular the current investor sentiment, are key tailwinds behind the NIB share price right now.
NIB share price snapshot
The NIB share price has posted a year to date gain of 29.3%, extending the previous 12 month's climb of 67%.
These returns have outpaced the S&P/ASX 200 Index (ASX: XJO)'s lift of around 25% over the past year.
NIB shares have climbed 21% over the past month alone, and are almost 4% in the green over the past week.
