MTDR

Matador Resources ($MTDR) Executives' 18-Month Buying Spree: Why They Keep Purchasing Despite 25% Stock Decline

11/04/2025 12:39

Joseph Foran, Chairman of Matador Resources ($MTDR), has purchased company shares an extraordinary 37 times over the past 18 months. This isn't ceremonial buying. In April 2025 alone, he purchased $10 million worth in a single day, and when shares dropped below $40 in October, he bought 9,500 shares in one transaction. Matador Resources is an independent energy company headquartered in Dallas, Texas, specializing in U.S. shale oil and natural gas development. Operating in major U.S. shale regions including the Delaware Basin, Eagle Ford, and Haynesville, the company maintains a vertically integrated structure encompassing both upstream (exploration, development, production) and midstream operations (gas processing, oil transportation, gathering services). Known in the industry for operational efficiency and capital discipline, Matador strengthened its position through a $1.91 billion Delaware Basin asset acquisition in June 2024. Foran's purchases were just the beginning. Analysis of insider trading data reveals 75 transactions from June 2024 through November 2025, and remarkably, every single transaction was a purchase. Not one sale occurred. EVP Bryan Erman bought 8 times, EVP Christopher Calvert 7 times, and EVP Robert Macalik 6 times. Including the board of directors, the entire executive team appeared coordinated in buying company shares exclusively. Even more intriguing is their timing. Concentrated buying began in August 2024 as shares started declining from their $63 peak, with the most aggressive purchases occurring during March-May 2025 and recently in October-November when shares fell to the mid-$40s. Particularly during April 2025's sharp drop to $38, Chairman Foran purchased $10 million worth over two consecutive days, exemplifying classic 'buying the dip' behavior. Why is the market ignoring their conviction? The fundamentals make it even more puzzling. Q1 2025 earnings per share of $1.99 significantly beat consensus estimates of $1.80, while revenue of $1.01 billion grew 28.7% year-over-year. Q3 also delivered EPS of $1.36, beating estimates of $1.22 by 11%. The key metric of daily oil production steadily increased each quarter, reaching 119,556 barrels in Q3. The problem lay in natural gas. Matador's Q3 average natural gas selling price of $2.03 per MCF fell well short of the $2.46 estimate. While natural gas represents only about 12% of total revenue, the significant price decline has sparked investor concerns. Additionally, the broader U.S. shale industry faces pressure from falling oil prices and rising construction costs due to tariffs, leading to widespread capital expenditure cuts and growth slowdown fears. However, examining insider buying patterns reveals a different picture. These executives aren't simply buying because shares are cheap; they're acting on firm conviction about the company's fundamentals. Chairman Foran is systematically increasing his stake through various trusts, while other executives actively utilize employee stock purchase plans for long-term investment. This clearly differs from opportunistic one-off buying. Industry experts note Matador's relative strengths. While most shale companies are cutting capital expenditures, Matador continues increasing production and maintains its target of 210,000 barrels per day by 2026. The Hugh Brinson pipeline, scheduled for Q4 2026 operation, is expected to generate an additional $90 million annually, providing clear medium-term growth drivers. Matador's current P/E ratio of 6.3x significantly undervalues compared to the industry average of 15-20x. The 3.8% dividend yield reflects consistent shareholder returns based on stable cash flows. Analyst price targets of $46-59 suggest substantial upside potential from current levels. Investors should focus on the persistence of insider buying. Typically, insider transactions concentrate over 3-6 months, but Matador has maintained steady buying for 18 months. This reflects genuine conviction about the company's long-term prospects rather than mere stock price support gestures. Natural gas price recovery and completion of shale industry restructuring will be key variables. If natural gas prices recover above $3 per MCF and industry overcapacity corrections complete, quality companies like Matador could see revaluation. Insiders may have anticipated this scenario 18 months ago, steadily building their positions.