We recently compiled a list of the 10 Large-Cap Stocks Insiders Are Buying Recently. In this article, we are going to take a look at where Diamondback Energy, Inc. (NASDAQ:FANG) stands against the other large-cap stocks.
Investors should closely monitor insider trading activity as it can provide valuable insights into a company’s future prospects. Insiders, such as executives and directors, possess intimate knowledge of the company’s operations and strategic direction. When these individuals invest their own capital in company stock, it often signals strong confidence in the company’s future performance.
While not an infallible indicator, significant insider buying activity can suggest that the company may be undervalued or poised for growth. Conversely, while insider selling can have various motivations, it can sometimes signal concerns about the company’s future.
It’s crucial to remember that insider trading activity should be analyzed within the broader context of the company’s fundamentals, industry trends, and overall market conditions. A stock seeing heavy insider buying doesn’t always mean it will go up sharply in the future. Therefore, investors should carefully consider the underlying reasons for insider transactions and conduct thorough due diligence before making investment decisions based on this information alone. By carefully analyzing insider trading activity alongside other relevant factors, investors can gain valuable insights into a company’s prospects and make more informed investment decisions.
To come up with the 10 names, we only considered stocks with a market capitalization of more than $10 billion. We first used Insider Monkey’s insider trading stock screener and looked for stocks with at least two insiders buying over the last six months.
With each stock we note the number of recent insider purchases and the company’s current market capitalization. But why is it important to follow insider activity? Our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds, focusing on insider trading and stock picks from hedge fund investor newsletters and conferences. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A pipeline worker overseeing the flow of crude oil into storage tanks from an integrated water system.
Diamondback Energy, Inc. (NASDAQ:FANG)
Number of Recent Insider Purchases: 2
Market Cap: $50.222 billion
Diamondback is an oil and gas exploration and production giant. What sets it apart from other competing companies is its strong presence in the Permian Basin (West Texas), which is considered one of the most prolific oil-producing regions in the world. The company’s low-cost structure in this region allows it to have an advantage and remain afloat in a fluctuating oil price environment.
For the three months ended Sept. 30, 2024, Diamondback reported total revenue of $2.65 billion, compared to $2.34 billion in the same period of 2023. Adjusted free cash flow for the period was $1.0 billion, which compares to $884 million in the same quarter of the prior year.
The company made an important strategic move in Sept. 2024, when it completed its $26 billion merger with Endeavor Energy Resources. The newly combined company was projected to produce more than 816,000 barrels of oil equivalent (BOE) per day. This large-cap stock that insiders have been buying recently is also one of the 12 Hot Oil Stocks to Buy According to Hedge Funds.
Over the last 12 months, Diamondback Energy shares gained 10.81%, reaching $171.60 per share.
Overall FANG ranks 6th on our list of the large-cap stocks insiders are buying recently. While we acknowledge the potential of FANG as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than FANG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
