Yahoo Finance Insiders probably made the right decision selling US$3.8m worth of shares earlier this year as Diamondback Energy, Inc.'s (NASDAQ:FANG)) stock dips by 4.8%.
By selling US$3.8m worth of Diamondback Energy, Inc. (NASDAQ:FANG) stock at an average sell price of US$139 over the last year, insiders seemed to have made the most of their holdings. The company's market valuation decreased by US$1.0b after the stock price dropped 4.8% over the past week, but insiders were spared from painful losses.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for Diamondback Energy
The Last 12 Months Of Insider Transactions At Diamondback Energy
In the last twelve months, the biggest single sale by an insider was when the Executive Vice President of Special Projects, Thomas Hawkins, sold US$1.1m worth of shares at a price of US$138 per share. That means that an insider was selling shares at below the current price (US$138). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 47% of Thomas Hawkins's stake.
In the last year Diamondback Energy insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insiders At Diamondback Energy Have Sold Stock Recently
Over the last three months, we've seen significant insider selling at Diamondback Energy. In total, Executive VP P. Zmigrosky dumped US$276k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
Does Diamondback Energy Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Diamondback Energy insiders own about US$111m worth of shares (which is 0.4% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Diamondback Energy Tell Us?
An insider hasn't bought Diamondback Energy stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. But since Diamondback Energy is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Diamondback Energy. When we did our research, we found 4 warning signs for Diamondback Energy (1 shouldn't be ignored!) that we believe deserve your full attention.
But note: Diamondback Energy may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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