Charles Davidson’s Wexford Capital has reduced by 10% its position in Diamondback Energy Inc (NASDAQ:FANG), a $4.5 billion market cap independent oil and natural gas company. The fund disposed of 1.0 million shares of Common Stock (par value $0.01) last week, at a price of $89.12 per share. Following the reported transaction, Wexford Capital owns 8.63 million shares of the oil and natural gas company, worth roughly $761.745 million at the current stock price.
Despite the last sale Mr. Davidson’s fund is still the largest hedge fund shareholder at Diamondback Energy Inc (NASDAQ:FANG) –amongst those we keep track of. Nonetheless, Wexford Capital has been trimming its position in the stock for more than a year now. The fund had disclosed ownership of 16.41 million shares by the end of Q1 2013, compared to 9.89 million shares by the end of Q1 2014.
The second largest hedge fund shareholder, Donald Chiboucis’ Columbus Circle Investors, also disclosed having cut its exposure to Diamondback Energy Inc (NASDAQ:FANG) over the last reported quarter. After reducing its stake by 9%, the fund owns 1.27 million shares of the company. Similar is Ken Griffin’s Citadel Investment Group’s case; the hedge fund last disclosed having cut its bets on the company by 44% and now owns 587,416 shares.
Insiders have been selling the stock too, lately. Starting in late February, nine insiders disposed of the company’s stock; they sold more than $260 million in stock, or 3.2 million shares.
All of these sales can be understood when one looks at Diamondback Energy Inc (NASDAQ:FANG)’s stock price movement. Since the beginning of the year, the stock price if up almost 70%, so upside for preexisting stockholders has been huge. The market certainly values the company’s industry leading margins and returns, as the stock now trades at 56 times the company’s earnings, almost double its industry’s average.
Disclosure: Javier Hasse holds no position in any stocks or funds mentioned