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Diamondback Energy, Inc. (FANG): Among the Large-Cap Stocks Insiders Are Buying Recently

AInvestSaturday, Feb 1, 2025 10:13 pm ET
2min read


Diamondback Energy, Inc. (FANG), an independent oil and natural gas company, has been making waves in the energy sector, with insiders taking notice and increasing their investments in the company. As the Permian Basin's largest pure-play, Diamondback Energy has been expanding its scale and operational efficiency, attracting the attention of Wall Street insiders. In this article, we will delve into the key factors driving Diamondback Energy's stock performance and compare it to other large-cap oil and gas stocks.



Diamondback Energy's Permian Basin operations are a significant advantage, as the region is one of the most prolific oil-producing environments in the world. This allows the company to maintain a low-cost structure and remain profitable even in fluctuating oil price environments. The company's strategic move to merge with Endeavor Energy Resources in September 2024 further solidified its position in the Permian Basin, with the combined company projected to produce more than 816,000 barrels of oil equivalent (BOE) per day. This merger is expected to lower Diamondback's production costs and optimize combined operations, with ~$550 MM of synergies expected to be realized earlier than originally planned.

The recent merger with Endeavor Energy Resources has significantly enhanced Diamondback's production capacity and cost structure. The combined company is expected to produce over 816,000 barrels of oil equivalent (BOE) per day, which is a substantial increase from Diamondback's previous production levels. This merger also aims to lower Diamondback's production costs and optimize combined operations, with management collaboration expected to yield significant cost savings and operational efficiencies. The expected synergies from this combination further solidify Diamondback's position as a leading Permian pure-play with a low breakeven, resilient FCF & returns, and room for further efficiency gains.



Diamondback Energy's stock performance has been driven by several key factors, including its strong financial performance, strategic mergers and acquisitions, and low-cost structure in the Permian Basin. The company reported total revenue of $2.65 billion for the three months ended Sept. 30, 2024, a 13.2% increase from the same period in 2023. Additionally, adjusted free cash flow for the period was $1.0 billion, up from $884 million in the same quarter of the prior year. These strong financial results indicate the company's ability to generate revenue and cash flow, which can drive stock performance.

Comparing Diamondback Energy's stock performance to other large-cap oil and gas stocks, we can observe the following:

* Over the last 12 months, Diamondback Energy shares gained 10.81%, reaching $171.60 per share. This performance is in line with or slightly better than some of its large-cap peers, such as ExxonMobil (XOM) and Chevron (CVX), which have gained 8.57% and 11.23% respectively over the same period.
* Diamondback Energy ranks 6th on our list of the large-cap stocks insiders are buying recently, indicating that insiders have a positive outlook on the company's prospects compared to other large-cap oil and gas stocks.

In conclusion, Diamondback Energy's strong financial performance, strategic mergers and acquisitions, and low-cost structure in the Permian Basin are key drivers behind its stock performance. While its stock performance is in line with or slightly better than some of its large-cap peers, insiders' positive outlook on the company suggests that Diamondback Energy may have significant growth potential in the future. As the Permian Basin continues to be one of the most productive oil regions in the world, Diamondback Energy's low-cost structure enables it to maintain profitability even in challenging market conditions.
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.