TPL

Texas Pacific Land ($TPL) Director Provides 'Vote of Confidence' With Daily Purchases Over Nine Months Amid Price Volatility

05/14/2025 14:58

Texas Pacific Land's ($TPL) Director Murray Stahl Demonstrates Confidence Through Consistent Share Purchases Following a dramatic price surge from late 2024 to early 2025, Texas Pacific Land Corporation ($TPL) has entered a corrective phase, yet Director Murray Stahl's persistent share purchasing activity continues to inspire investor confidence. Stahl has maintained a unique pattern of buying 10-12 shares almost daily from August 2024 through May 2025. $TPL's stock soared over 135% in the past six months, reaching a peak of $1,726 per share on November 22, 2024, before retracing to the current $1,378 level—approximately 20% below its high. Despite falling 4.6% on its first day of S&P 500 inclusion in November 2024, the stock has gained about 25% year-to-date, significantly outperforming the S&P 500's modest 0.18% increase. Texas Pacific Land maintains a unique business model, owning approximately 873,000 acres of land in Texas's Permian Basin. The company generates revenue primarily through oil and gas royalties, easements, commercial leases, and land sales. It also provides water services to oil and gas operators through its subsidiary, Texas Pacific Water Resources. Notably, TPL operates with zero debt and currently holds a net cash position of $460 million, highlighting its financial stability. What makes Stahl's purchasing behavior particularly interesting is that most of his buy orders were executed pursuant to Rule 10b5-1 plans adopted on May 14 and November 21, 2024. This indicates that his purchases were pre-planned with a long-term perspective rather than reactions to short-term market fluctuations or temporary information. Further notable is that major shareholder Horizon Kinetics Asset Management LLC has maintained a similar pattern of small, consistent purchases. According to an amended Schedule 13D filed on February 28, 2025, Horizon Kinetics holds 3,578,173 shares (approximately 16% stake) and is closely associated with Director Stahl. Conversely, several executives have executed sell transactions. Chief Accounting Officer Stephanie Buffington sold 210 shares for approximately $290,000 in November 2024. Chief Financial Officer Chris Steddum divested 350 shares in November 2024 and an additional 750 shares in March 2025. Officer Micheal Dobbs also sold 1,150 shares in March 2025. While these sales may represent profit-taking, they occurred during periods of substantial stock appreciation, possibly indicating some caution among executives. TPL's Q1 2025 financial results showed revenue of $196 million (up 13% year-over-year) and net income of $120.7 million (a 5.4% increase). However, the adjusted EBITDA of $169.4 million fell short of Wall Street's $180 million expectation, primarily due to a 7.5% decline in oil prices. Positively, increased production volumes and higher natural gas prices partially offset the impact of lower oil prices. Energy sector analysts suggest that $TPL's business model, leveraging its vast Permian Basin landholdings, makes it less sensitive to oil price fluctuations than typical energy companies. The water services segment is contributing to revenue diversification, generating $69 million in Q1 (an 11% year-over-year increase). From an investment perspective, the consistent purchases by Stahl and Horizon Kinetics signal strong confidence in TPL's long-term value. The company's debt-free operations and shareholder-friendly policies, including two special dividends of $10 each in 2024, further enhance its appeal. However, with a P/E ratio of 67, the company's high valuation relative to industry averages may create some near-term pressure. TPL's future performance will depend not only on energy prices but also on resource development activities, water business expansion, and efficient utilization of land assets. Particularly important growth drivers include expanding pipeline projects to address water handling bottlenecks and increasing per-barrel revenues. Considering insider trading patterns, financial health, and the long-term business model, $TPL offers a differentiated investment opportunity within the energy sector despite short-term volatility. Investors should remain mindful of the high valuation and risks associated with energy price fluctuations.

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