Some Diamondback Energy, Inc. (NASDAQ:FANG) shareholders may be a little concerned to see that the Director, Charles Meloy, recently sold a substantial US$3.0m worth of stock at a price of US$189 per share. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 1.7%.

The Last 12 Months Of Insider Transactions At Diamondback Energy

The insider, Lyndal Greth, made the biggest insider sale in the last 12 months. That single transaction was for US$2.2b worth of shares at a price of US$170 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$201. 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. 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. It is worth noting that this sale was only 13% of Lyndal Greth's holding.

Diamondback Energy insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Insider Ownership Of Diamondback Energy

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Diamondback Energy insiders own about US$17b worth of shares (which is 31% 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.

So What Does This Data Suggest About Diamondback Energy Insiders?

Insiders sold Diamondback Energy shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. While it's good to be aware of 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. For example, Diamondback Energy has 4 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

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 of direct interests only, but not derivative transactions or indirect interests.

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.