Have Diamondback Energy Insiders Been Selling Stock?

We wouldn't blame Diamondback Energy, Inc. (NASDAQ:FANG) shareholders if they were a little worried about the fact that Matthew Van’t Hof, the President & CFO recently netted about US$4.9m selling shares at an average price of US$196. That sale reduced their total holding by 17% which is hardly insignificant, but far from the worst we've seen.

View our latest analysis for Diamondback Energy

The Last 12 Months Of Insider Transactions At Diamondback Energy

In fact, the recent sale by Matthew Van’t Hof was the biggest sale of Diamondback Energy shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at below the current price (US$197). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 17%of Matthew Van’t Hof's holding.

Insiders in Diamondback Energy didn't buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Diamondback Energy insiders own 0.5% of the company, currently worth about US$169m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Diamondback Energy Insider Transactions Indicate?

Insiders sold Diamondback Energy shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we've identified 2 warning signs with Diamondback Energy and understanding these should be part of your investment process.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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 of direct interests only, but not derivative transactions or indirect interests.

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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.