TPL

Texas Pacific Land ($TPL) Directors Signal Confidence With 600+ Days of Consecutive Purchases Amid Market Volatility

04/29/2025 10:56

Amid significant stock price volatility over recent months, Texas Pacific Land Corporation ($TPL) has witnessed persistent share purchases by company directors and major shareholders. Particularly noteworthy is the steady accumulation by Director Murray Stahl and regular buying patterns from Horizon Kinetics Asset Management LLC, signaling strong insider confidence despite market uncertainties. Since its inclusion in the S&P 500 index in November 2024, $TPL has experienced increased volatility but still maintains over 100% returns compared to a year ago. The company owns approximately 880,000 acres of vast land in the Permian Basin of Texas, operating a unique business model primarily generating revenue from oil and gas royalties and water services. Examining insider trading data reveals that Director Murray Stahl has consistently purchased 10-12 shares almost daily from August 2024 through April 2025. These acquisitions occurred at various price points ranging from $800 to $1,400 per share, with most purchases executed according to a pre-planned Rule 10b5-1 plan. This suggests long-term conviction unaffected by short-term market fluctuations. Horizon Kinetics Asset Management LLC, a major shareholder owning 16% of TPL, has regularly purchased 1-3 shares periodically. Murray Stahl also serves as Chairman and CEO of this asset management firm, and his combined direct and indirect holdings represent a substantial stake in the company. There have been some insider sales as well. In November 2024, CAO Stephanie Buffington sold 210 shares for approximately $290,000, and CFO Chris Steddum sold 350 shares for $469,000. In March 2025, Officer Micheal Dobbs sold 1,150 shares for about $1.46 million. However, these sales are relatively small compared to the overall pattern of insider purchases. The energy sector, where $TPL operates, has experienced significant volatility recently due to global supply chain issues and geopolitical uncertainties. Donald Trump's announcement to cancel Venezuela's oil license and escalating US-China trade tensions have impacted the entire energy sector. Nevertheless, production activities in the Permian Basin remain robust, providing a relatively stable foundation for TPL's business. Financially, $TPL demonstrates remarkable strength. For the third quarter of 2024, the company reported revenue of $173.6 million and net income of $106.6 million. Trailing twelve months (TTM) revenue stands at $705.82 million with net income of $453.96 million, yielding an impressive profit margin of 64.32%. The company's ROE of 41.73% substantially exceeds the industry average of 14%. Even more impressive is the company's financial position. $TPL operates with minimal leverage, with total debt of just $1.25 million. Conversely, the company holds $369.84 million in cash, ensuring ample liquidity for contingencies. This robust financial structure enabled the company to distribute special dividends of $10 per share twice in 2024, in June and November. Analysts maintain cautiously optimistic outlooks for $TPL, with an average price target of $1,300, implying a slight downside from current levels. However, this reflects a fair value assessment following the recent rapid stock appreciation. With a P/E ratio of 68.48, there may be some valuation concerns in the short term. $TPL is also exploring new business opportunities, including leasing land for data centers, opening possibilities for diversification beyond traditional oil and gas royalty business. This demonstrates the company's flexibility to adapt in an era of energy transition. The persistent buying pattern by insiders reflects strong conviction in the company's long-term value despite short-term price fluctuations. Director Murray Stahl's pattern of purchasing shares almost daily for over 600 days is highly unusual and interpreted as a powerful signal of confidence. The fact that most purchases were made according to Rule 10b5-1 plans also suggests a systematic long-term strategy for expanding ownership stakes. In summary, insider trading patterns at Texas Pacific Land are sending strong buy signals, reflecting insiders' confidence in the company's solid financial condition and the exclusive nature of its business model. However, considering recent high valuations and volatility in the energy sector, investors should also prepare for potential short-term price adjustments.

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