Munger Mode rating: 2 out of 5 — Sell. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
Diamondback is, in our judgment, the best-run oil producer in America — and it is still an oil producer. The company just posted a quarter for the ages: over one million barrels of oil equivalent per day, $96.82 realized per barrel of oil, $2.3 billion of free cash flow in ninety days, and lease operating costs under $6 a barrel. Management under Kaes Van't Hof is candid, numerate, and allocates capital the way we would teach it. And yet the same six months that produced these riches also included a $1.4 billion writedown of the very same rocks, and the company paid $276 million in the quarter to dispose of its natural gas because Permian pipes are full. Both outcomes came from prices Diamondback does not set and cannot influence.
Recent filings analysed: 10-Q (2026-08-05), 8-K (2026-08-03), 8-K (2026-07-13), 8-K (2026-06-15).
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