TPL

Texas Pacific Land ($TPL) Director Maintains Daily Purchase Streak for 10 Months Despite Soaring Stock Price

04/29/2025 16:45

Texas Pacific Land Corp ($TPL) has seen consistent share purchases by director Murray Stahl and major shareholder Horizon Kinetics Asset Management LLC over the past year. This persistent buying pattern has continued even amid recent market volatility, drawing significant attention from investors. TPL's stock has experienced substantial price fluctuations over the last 12 months. Trading at around $580 in early June 2024, the share price surged to $1,700 by late November before settling at its current level of approximately $1,350. Notably, the stock saw a significant jump after the company announced a special dividend of $10 per share on June 13, 2024, and achieved another milestone on November 26, 2024, when it was added to the S&P 500 index. Insider trading records reveal that board member Murray Stahl has been consistently purchasing shares almost daily since August 2024. He initially bought 12 shares at a time, more recently adjusting to 10 shares per purchase, following a Rule 10b5-1 plan adopted on May 14, 2024. Stahl has accumulated an estimated 1,000+ shares between mid-August 2024 and late April 2025. Murray Stahl is a well-known value investment expert in the U.S. investment community and is also the founder and CEO of Horizon Kinetics. His continuous buying can be interpreted as a strong signal of confidence in TPL's long-term value. Major shareholder Horizon Kinetics has also demonstrated a steady buying pattern, though on a relatively smaller scale, typically purchasing 1-3 shares regularly. According to an amended Schedule 13D filed on February 28, 2025, Horizon Kinetics owns 1,271,975 shares (approximately 16%) of TPL, while Murray Stahl holds a direct interest in 2,474 shares and an indirect interest in approximately 53,550 shares. It's worth noting that there have been some selling transactions by senior executives. In November 2024, CAO Stephanie Buffington sold 210 shares for approximately $290,000, while CFO Chris Steddum sold 350 shares for about $470,000 in the same month. In March 2025, Steddum sold an additional 750 shares. These executive sales may be attributed to personal financial needs or portfolio adjustments, but the overall insider trading pattern strongly leans toward buying. TPL operates with a unique business model that differs from typical energy companies. It owns vast tracts of land and oil and gas royalty interests in the Texas Permian Basin, providing easements for oil and gas transportation and leasing land for various operations. The company also offers water services, including sourcing and treatment for operators in the Permian Basin. This business model translates into exceptional profitability. Financial data indicates that TPL maintains a profit margin of 64.32% and a Return on Equity (ROE) of 41.73%, significantly outperforming the industry average of 14%. Additionally, the company's operating cash flow (TTM) stands at $490.67 million, demonstrating strong cash generation capabilities, while its total debt is merely $1.25 million, indicating a remarkably solid financial position. As U.S. markets have shown volatility this year, particularly in early April 2025 when markets plunged due to escalating U.S.-China trade tensions, TPL's stock also declined by approximately 22% from $1,391 on April 2 to $1,079 on April 4 before rebounding. Despite this market instability, Director Murray Stahl's purchases continued uninterrupted. This persistent insider buying suggests that insiders believe the current stock price is below the company's intrinsic value. The continued purchases despite challenging factors such as oil and gas price volatility and U.S. economic uncertainties demonstrate insiders' strong confidence in TPL's long-term business model. Meanwhile, TPL's high valuation (TTM P/E of 67.75) may be a concern for some investors. However, this can be viewed as a reflection of the company's unique business model, high profit margins, low debt levels, and future growth potential. Furthermore, the company maintains a low payout ratio of 23%, reinvesting 77% of its earnings in growth initiatives, which provides ample capacity to support future revenue and earnings growth. In conclusion, the consistent buying behavior of Texas Pacific Land's insiders, particularly Director Murray Stahl and Horizon Kinetics, can be interpreted as a positive signal of strong confidence in the company's long-term value and growth potential. However, considering recent market volatility and TPL's high valuation, investors should balance their assessment of the company's solid fundamentals with potential risks.

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