TPL

Texas Pacific Land ($TPL) Insiders' 10-Month Buying Streak - Consistent Confidence Signals Amid Dramatic Price Swings

04/09/2025 07:38

Insiders at Texas Pacific Land Corp ($TPL) have been consistently purchasing shares over the past 10 months, signaling strong internal confidence in this large land-owning company that generates substantial revenue from oil and gas royalties. Texas Pacific Land owns approximately 880,000 acres of land across 20 counties in West Texas. Founded in 1888, the company converted from a trust to a corporation in 2021 and currently generates most of its revenue from oil and gas royalties (about two-thirds of revenue) and water services for hydraulic fracturing (approximately 30% of revenue). The stock price of $TPL has shown significant volatility over the past year. From trading at around $580 in early June 2024, it surged to a peak of $1,726 in late November 2024, before undergoing a correction to its current price of $1,117.49. This still represents an increase of approximately 90% from early 2024 levels. Particularly noteworthy is the buying pattern of company insiders, especially major shareholder Horizon Kinetics Asset Management LLC and director Murray Stahl. According to SEC filings, Horizon Kinetics consistently purchased small amounts of shares (typically 1-3 shares) almost daily from June 2024 through February 2025. Similarly, director Murray Stahl consistently purchased 10-12 shares almost daily from August 2024 through April 2025. Murray Stahl is also a key figure at Horizon Kinetics, and according to footnotes in the SEC filings, he does not exercise investment discretion regarding shares held by accounts managed by Horizon Kinetics. This suggests that Stahl's personal purchases and Horizon Kinetics' purchases represent separate investment decisions. In contrast, some executives executed limited sales. On November 13, 2024, Chief Accounting Officer Stephanie Buffington sold 210 shares for approximately $290,000, and the following day, Chief Financial Officer Chris Steddum sold 350 shares for about $470,000. In March 2025, CFO Steddum sold another 750 shares for approximately $970,000, while officer Micheal W Dobbs sold 1,150 shares for about $1.46 million. These selling transactions are limited in scale and appear to be driven by personal financial needs rather than negative signals about the company's performance or outlook. The timing of insider sales following significant price appreciation suggests they may have been partially motivated by profit-taking. $TPL achieved a significant milestone in November 2024 by being added to the S&P 500 index. On its first day of inclusion, November 26, 2024, the stock dropped 4.6%, but was still up over 300% year-to-date at that point. This index inclusion is expected to increase the company's visibility and institutional investor interest, potentially having a positive long-term impact on the stock price. Financially, $TPL has demonstrated solid performance. In the second quarter results announced in August 2024, the company reported adjusted earnings of $4.98 per share, up from $4.35 in the same period the previous year. In the third quarter results announced in November 2024, the company achieved a net income of $106.6 million. The company also announced a special dividend of $10 per share in June 2024. Looking at full-year 2023 results, $TPL recorded revenue of $631.6 million and net income of $405.6 million. With total assets of $1.156 billion and total equity of $1.043 billion, the company maintains a healthy financial structure with a low debt ratio. The future outlook for $TPL is closely tied to trends in the oil and gas industry. Recently, energy prices have become increasingly volatile, and pressure to transition to green energy has been growing. However, $TPL holds vast land assets concentrated in the Permian Basin, which should provide stable royalty income as long as oil and gas production continues in this region. The company is also diversifying its revenue streams through water services and exploring new business opportunities such as leasing land for data centers. This demonstrates that the company is pursuing adaptive strategies rather than relying solely on the traditional energy industry. The consistent buying behavior of Horizon Kinetics and Murray Stahl suggests they have strong confidence in the company's long-term growth potential. It is particularly noteworthy that they have maintained consistent purchases even in a highly volatile environment where the stock price has experienced both significant increases and decreases. Investors should consider this long-term buying pattern by insiders, along with the company's solid financial condition and the milestone of S&P 500 inclusion. However, uncertainties in the oil and gas industry and the possibility of a correction following the recent sharp price increase remain risk factors. Overall, the insider trading pattern at $TPL demonstrates internal confidence in the company's future and, combined with the company's robust business model, can be interpreted as a positive signal for long-term investors.

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