TPL

Texas Pacific Land($TPL) Directors and Major Shareholders Continue Steady Buying Despite 200% Surge and Subsequent Correction

04/15/2025 16:21

Directors and major shareholders of Texas Pacific Land Corporation ($TPL) have consistently purchased company shares throughout late 2024 and early 2025, demonstrating strong confidence in the company's long-term value despite significant price volatility. TPL's stock has experienced a remarkable trajectory, climbing from around $585 in early June 2024 to over $1,700 by late November 2024 – a staggering 200% increase in just six months. After a period of correction in December and early 2025, the stock has stabilized in the $1,200 range, still boasting an impressive 118% increase over the past 12 months. Notably, the company achieved a significant milestone in November 2024 when it was added to the S&P 500 index. Amidst these dramatic price movements, Director Murray Stahl and major shareholder Horizon Kinetics Asset Management LLC (HKAM) have displayed a noteworthy buying pattern. According to insider trading records, Director Stahl has consistently purchased 10-12 shares almost daily since August 2024, continuing through November 2024 when prices exceeded $1,400 and even during the sharp correction in early April 2025. These purchases were made pursuant to a Rule 10b5-1 plan, suggesting a strategic commitment to the company's long-term value regardless of market conditions. Concurrently, HKAM has maintained steady small-scale purchases of 1-3 shares. Footnotes indicate that Murray Stahl is associated with HKAM, which held approximately 16% of TPL as of February 2024. This consistent buying pattern from key decision-makers represents a powerful signal that they continue to invest their personal capital in the company. Conversely, some executives have sold shares near price peaks. CFO Chris Steddum sold 350 shares and CAO Stephanie Buffington sold 210 shares in November 2024, while in March 2025, Steddum divested an additional 750 shares and executive Micheal Dobbs sold 1,150 shares. However, these sales represent a relatively minor portion of overall insider activity and could be attributed to personal financial needs rather than lack of confidence. Texas Pacific Land Corporation possesses a unique business model, owning approximately 880,000 acres in the Permian Basin, America's most productive oil region. Its revenue streams primarily consist of land leases, oil and gas royalties, and water-related services, resulting in minimal operational costs and an impressive 64.32% profit margin. The company's financial health is exceptionally strong, with $370 million in cash compared to just $1.25 million in debt. In June 2024, TPL announced a special dividend of $10 per share, enhancing its shareholder return policy. The company's Q2 2024 earnings report showed earnings per share of $4.98, a 14.5% year-over-year increase, though revenue of $172.3 million fell short of analysts' expectations of $182.4 million. While TPL's business model is somewhat influenced by energy prices, its position as a landowner provides relatively more stable earnings throughout the boom-and-bust cycles of oil production. Recently, the company has been exploring new business opportunities, including leasing land for data centers, potentially diversifying its revenue streams. However, TPL's current valuation metrics – including a P/E ratio of 64.61 and P/S ratio of 40.69 – significantly exceed industry averages, suggesting that high growth expectations are already priced into the stock. Additionally, potential risks include declining oil prices or reduced production in the Permian Basin region. In conclusion, the persistent buying signals from insiders, despite the elevated valuation, demonstrate strong conviction in the company's long-term value and growth potential. Director Stahl's and HKAM's steady purchasing provides a positive signal to investors, overshadowing the occasional executive sales. Particularly noteworthy is the continued insider buying during the market's sharp decline in early April 2025, which may indicate confidence in the company's fundamental strength despite broader market turbulence.

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