TPL

Texas Pacific Land($TPL): Insiders Continue 10-Month Buying Streak Despite Recent Plunge, Supporting Energy Giant with 64% Profit Margin

04/14/2025 16:38

Texas Pacific Land Corporation ($TPL) has been attracting investor attention with consistent insider buying signals despite remarkable price appreciation and recent volatility. Over the past year, $TPL's stock has surged approximately 90%, maintaining its long-term upward trajectory despite recent sharp corrections. The stock price journey began around $580 in early June 2024, soaring to $1,726 by late November 2024. After some consolidation, it recovered to approximately $1,400 by January 2025, before plummeting from $1,391 to $1,079 in early April 2025 amid significant market volatility driven by trade tensions and tariff changes. Currently, it has rebounded to around $1,236, showing signs of recovery. What's particularly noteworthy amid this price volatility is the consistent buying pattern from company insiders. Major shareholder Horizon Kinetics Asset Management LLC and Director Murray Stahl have been steadily purchasing small quantities of shares almost daily over the past 10 months. Horizon Kinetics typically bought in 1-3 share increments, while Murray Stahl purchased in 10-12 share blocks regularly. These purchases have continued consistently regardless of price fluctuations, with some executed as pre-planned transactions under SEC Rule 10b5-1. Texas Pacific Land Corporation ranks among America's largest landowners and resource management companies, controlling approximately 873,000 surface acres with substantial oil and gas royalty interests. The company primarily operates in the Permian Basin of Texas, leasing land for oil and gas operations, providing easements for transportation, and offering water services through its subsidiary, Texas Pacific Water Resources LLC. The company's financial health is exceptionally robust. According to recent financial data, $TPL reports: 1) annual revenue of $705.82 million, 2) net income of $453.96 million, 3) an extraordinarily high profit margin of 64.32%, 4) return on equity (ROE) of 41.73%, and 5) quarterly revenue growth (YoY) of 11.50%. Additionally, its remarkably low debt-to-equity ratio of 0.11% and high current ratio of 10.81 demonstrate exceptional financial stability. In November 2024, $TPL was included in the S&P 500 index. Although the stock declined 4.6% on its first trading day after inclusion, this development represents a positive long-term factor that enhances the company's visibility and institutional investor base. In its Q3 2024 results, $TPL reported $173.6 million in revenue and $106.6 million in net income, with a dividend payment of $10 per share. A closer examination of insider trading data reveals intriguing patterns. Murray Stahl and Horizon Kinetics, which have an interconnected ownership structure, have continued purchases almost daily since June 2024. Notably, they maintained buying activity even when the stock surged above $1,600 in November 2024, and actually increased their purchase volumes when prices dropped sharply in early April 2025. When the stock fell to $1,117 on April 8, Stahl purchased 12 shares and continued buying daily through April 11. Conversely, some selling activity has occurred among executives. In November 2024, CAO Stephanie Buffington sold 210 shares at approximately $1,389, and CFO Chris Steddum sold 350 shares at around $1,340. In March 2025, Officer Micheal W Dobbs sold 1,150 shares at approximately $1,273, and CFO Steddum divested an additional 750 shares in the $1,291-$1,316 range. However, these sales likely reflect personal liquidity needs or portfolio rebalancing, as buying activity overwhelmingly dominates the overall insider trading trend. Examining broader energy sector trends reveals increased volatility since early 2025. After oil companies saw price increases following Trump's cancellation of Chevron's Venezuela license in late February, they declined in mid-March due to economic concerns and supply-demand expectation adjustments. Late March brought another rebound driven by crude oil inventory declines and Venezuelan supply concerns. Throughout this sector volatility, $TPL has maintained strong long-term performance. Looking forward, key considerations include the enduring value of the Permian Basin region and $TPL's land assets. The company is also exploring new business opportunities beyond traditional energy, such as data center leasing, presenting additional growth potential. Furthermore, its substantial cash holdings and minimal debt position it well for stable operations and continued shareholder returns despite future uncertainties. The consistent and persistent buying by insiders, particularly major shareholders and directors, demonstrates strong confidence in the company's long-term value. While recent price volatility has included sharp declines, insiders treating these as buying opportunities may provide an important signal to investors. Although risk factors including oil and gas price fluctuations, regulatory changes, and potential economic downturns must be considered, insider behavior conveys a positive message from a long-term perspective.

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