TPL

Texas Pacific Land ($TPL) Insiders Continue Buying Despite 250% Stock Surge

03/26/2025 14:29

Board members and major shareholders of Texas Pacific Land ($TPL) have been consistently buying shares even as the stock price soared more than 250% over a six-month period, signaling strong insider confidence in the company's long-term value. $TPL traded around $580 in June 2024 before rocketing to over $1,700 by mid-November. Throughout this dramatic price increase, Director Murray Stahl and the company's largest shareholder, Horizon Kinetics Asset Management LLC, continued their purchasing activity regardless of the rising price. The company owns approximately 880,000 acres of land in West Texas and generates significant revenue through oil and gas royalties and water-related services. Horizon Kinetics, which holds about 16% of TPL's shares, has been steadily buying small quantities of stock almost daily since June. Initially purchasing three shares per day, they adjusted to one share as prices climbed but maintained their consistent buying frequency. This pattern suggests the institutional investor is focused on long-term value rather than short-term gains. Director Murray Stahl demonstrated a similar pattern starting in August 2024, initially buying 12 shares per day and later adjusting to 10 shares per transaction. Notably, his purchases were made according to a Rule 10b5-1 plan, a predetermined schedule that allows insiders to buy shares while avoiding accusations of trading on inside information. This planned approach further emphasizes his long-term commitment. In contrast, some executives have sold portions of their holdings. CFO Chris Steddum sold 350 shares in November 2024 and an additional 750 shares in March 2025, while CAO Stephanie Buffington divested 210 shares in November 2024. Officer Micheal Dobbs also sold 1,150 shares in March 2025. However, these sales appear to be part of personal asset management or tax planning rather than reflecting concerns about the company's prospects, as they represent a minimal portion of the company's outstanding shares. $TPL's financial position is exceptionally strong. As of 2024, the company reports total assets of $1.25 billion with just $115.56 million in liabilities and $369.84 million in cash and short-term investments. Annual revenue stands at $705.82 million with net income of $453.96 million, yielding an impressive 64.32% profit margin. This extraordinary profitability stems from the company's unique business model. The company was added to the S&P 500 index in November 2024. While it initially dropped 4.6% on its first trading day in the index, it has shown strong recovery since. This inclusion is likely to attract more institutional investors and provide long-term support for the stock. Particularly interesting is that insider buying has continued even as the stock has corrected from its November peak of $1,726 to current trading levels between $1,200 and $1,400. This suggests insiders still find the current price attractive despite the significant run-up. $TPL's business is closely tied to trends in the oil and gas industry. Despite recent volatility in energy prices, the company has maintained stable earnings. It reported earnings per share of $4.98 with revenue of $172.33 million in Q2 2024, followed by slightly higher revenue of $173.6 million in Q3. The company also announced a special dividend of $10 per share in June 2024, providing direct returns to shareholders. Energy industry analysts note that TPL's business model differentiates it from traditional energy companies. The royalty income based on land ownership carries lower operational risk than direct oil producers while still benefiting from rising energy prices. The company has also potentially benefited from increased interest in domestic oil production following Trump's cancellation of Chevron's Venezuela license in February 2025. While the current P/E ratio of 64.5x indicates a premium valuation, the consistent insider buying activity suggests strong confidence in the company's future growth prospects. The potential value of TPL's vast Texas land holdings and its stable royalty income model continue to make it an attractive option for long-term investors.

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