John Stephenson Diamondback Energy FANG-Q BUY Aug 11, 2025

Has a 11% free cash flow yield. WTI is about to hit its 50-day moving average at $83. Sell the March $160 calls; 5 months out you get 5% income and 15% total return if it gets called away.

Shares jumped 9.38% on news that they will buy Endeavor for $26 billion. Other oil mergers didn't move the buying company's stock anything like this, so today's rally was a result of animal spirts gone wild in the market.

They just bought a $26 billion company taht strengthens their position in the Permian Basin. It's one of the strongest fundamental energy companies. Buy on pullback.

He's tired of waiting for energy (WTI) to break out of its range of $65-90, but maybe it finally will. 

Energy stocks continue to pay down debt alot and generate a lot of free cash flow. FANG is one of the best int his space. She expects 14% and 22% revenue and earnings growth. Is up over 20% this year.

Their deal with Endeavor will close in Q3 and be strong for FANG. Is a top energy name.

Bought more. Great management and M&A strategy, which will add to earnings regardless of the oil price. Likes their cost control and cash flow.

FANG is $42B market cap now, down 13% YTD and down 29% in a year, trading at 10.4X earnings with a 2.80% dividend (raised 11% in February). The balance sheet has some debt, but not a concerning amount. The sector is no one's favourite right now, with weakening oil prices. But we note the valuation reflects this, its last quarter was good, and estimates have been moving higher recently. Still, consensus calls for lower earnings this year and lower earnings next year. Thus it is hard to get too excited on it right now. We think its time will come, but we need to see better commodity pricing (preferred) or at least better investor sentiment. We would rate it a HOLD for now.
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This is the one Jim Cramer's always recommending. This one will be volatile. The one to pick if you want to have fun and make (or lose) a lot.

VLO is more refineries and such. Probably looking at a nicer dividend, but slower growth. This is the one for you if you just want to relax and collect the dividend.