TPL

Texas Pacific Land ($TPL): Insiders Keep Buying as Stock Doubles, Signaling Strong Confidence

04/17/2025 16:19

As Texas Pacific Land Corp ($TPL) stock has more than doubled in the past six months, consistent insider buying has caught the attention of market watchers. The steady share purchases by directors and major shareholders have been sending strong confidence signals to investors. Since its inclusion in the S&P 500 index last November, $TPL experienced a short-term correction but has maintained a strong upward trajectory over the long term. Currently trading at $1,277.58, TPL shares have significantly risen from around $580 in June 2024, even reaching above $1,700 in November. The most notable insider trading pattern during this remarkable price appreciation has been Director Murray Stahl's persistent buying. Since August 2024, Stahl has consistently purchased TPL shares almost daily. He initially bought mostly in 12-share increments, adjusted to 10 shares per purchase in February 2025, and recently returned to 12-share purchases. These acquisitions were predominantly made according to Rule 10b5-1 plans adopted on May 14, 2024, and November 21, 2024. Similarly, major shareholder Horizon Kinetics Asset Management LLC has demonstrated steady buying behavior, regularly purchasing 1-3 shares, expressing long-term confidence in TPL. As of November 2024, Horizon Kinetics reported holding a 16% stake in TPL. Founded in 1888, Texas Pacific Land owns approximately 880,000 acres of land in Texas' oil-rich Permian Basin. The company's primary revenue streams come from oil and gas royalties and water services sales. Recently, TPL has been exploring opportunities for data center leases on its vast land holdings, attracting investor interest. Financially, TPL has shown robust performance. In its second-quarter results announced in August 2024, the company reported adjusted earnings of $4.98 per share, up from $4.35 in the prior-year period. Quarterly revenue growth stood at 11.50% year-over-year, while quarterly earnings growth was 4.60%. The company's impressive 64.32% profit margin demonstrates exceptional profitability within the industry. However, there have been some insider sales from executives. In November 2024, CAO Stephanie Buffington sold 210 shares, and CFO Chris Steddum sold 350 shares. In March 2025, Steddum sold an additional 750 shares, while officer Micheal Dobbs sold 1,150 shares. These sales may represent personal financial needs or portfolio rebalancing rather than negative assessments of the company's long-term prospects. Despite the substantial price appreciation, continued insider buying suggests insiders believe the current share price remains below the company's intrinsic value. TPL's core business remains solid despite significant volatility in the energy sector. U.S. energy companies, including TPL, benefited from geopolitical issues such as the February 2025 cancellation of Venezuela-related licenses. While the P/E ratio of 66.04 and forward P/E of 37.74 are relatively high by conventional standards, investors appear willing to pay this premium given TPL's unique business model and high profitability. The company maintains low debt and strong cash liquidity, ensuring financial stability. TPL's future outlook is closely tied to oil and natural gas market trends. New business opportunities like data center leasing could provide additional growth engines. The consistent buying by Director Murray Stahl and Horizon Kinetics adds weight to this positive outlook and serves as an important signal to investors.

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