The fact that multiple Diamondback Energy, Inc. (NASDAQ:FANG) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At Diamondback Energy

Over the last year, we can see that the biggest insider sale was by the insider, Lyndal Greth, for US$2.3b worth of shares, at about US$175 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$129). So it is hard to draw any strong conclusion from it.

Over the last year, we can see that insiders have bought 10.83k shares worth US$1.8m. But insiders sold 13.32m shares worth US$2.3b. Over the last year we saw more insider selling of Diamondback Energy shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

Check out our latest analysis for Diamondback Energy

I will like Diamondback Energy better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Diamondback Energy Insiders Bought Stock Recently

Over the last quarter, Diamondback Energy insiders have spent a meaningful amount on shares. Specifically, Independent Director Frank Tsuru bought US$313k worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. 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 about US$13b worth of shares (which is 36% 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?

The recent insider purchase is heartening. But we can't say the same for the transactions over the last 12 months. The high levels of insider ownership, and the recent buying by an insider suggests they are well aligned and optimistic. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example, Diamondback Energy has 2 warning signs (and 1 which is significant) 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.

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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.