TPL

Texas Pacific Land ($TPL) Directors Keep Buying Through 134% Stock Surge: What Insiders See in Permian Basin Giant

05/16/2025 18:52

Texas Pacific Land Corp ($TPL) has seen remarkable stock performance with a 134% surge over the past year, while directors and major shareholders continue their consistent buying patterns, drawing significant investor attention. As of May 15, 2025, $TPL closed at $1,417.10, representing a substantial increase from around $585 in early June 2024. The stock even exceeded $1,700 in November 2024. This impressive rally can be attributed to various factors, including the company's inclusion in the S&P 500 index and rising oil prices, but the steady insider buying has served as a positive signal to investors throughout this period. Texas Pacific Land, with a market capitalization of approximately $29 billion, operates a unique business model based on its vast landholdings in the Permian Basin of Texas, generating revenue through oil and gas royalties and water services. The company boasts a strong financial structure with zero debt and an impressive profit margin exceeding 63%, creating stable cash flows from its land-based resources. Particularly noteworthy is the consistent stock purchasing pattern by Director Murray Stahl and major shareholder Horizon Kinetics Asset Management LLC. According to insider trading data, Stahl has consistently bought small batches of 10-12 shares almost daily from August 2024 through May 2025. Most of these transactions were executed under a Rule 10b5-1 plan, indicating they were pre-planned rather than based on non-public information. Similarly, Horizon Kinetics has steadily acquired 1-3 shares throughout the same period. Interestingly, Stahl and Horizon Kinetics are connected - disclosure documents reveal that while Stahl is a key figure at Horizon Kinetics, he does not exercise investment discretion regarding $TPL shares. This persistent buying behavior continued unchanged even as $TPL announced a special dividend of $10 per share in June 2024 and was added to the S&P 500 in November 2024. The insider purchases continued even after the stock price surged beyond $1,700. Conversely, some executive selling was also observed. In November 2024, CAO Stephanie Buffington sold 210 shares at approximately $1,389, and CFO Chris Steddum sold 350 shares at $1,340. Additionally, Steddum sold another 750 shares in March 2025. However, these executive sales likely represent personal financial management or diversification, while the overall insider trading pattern remains predominantly bullish. Examining $TPL's financial situation, the company reported a 5.4% year-over-year increase in net income to $120.7 million for Q1 2025, though this fell short of Wall Street expectations. The company's adjusted core profit of $169.4 million was below the analyst consensus of $180 million, largely due to the 7.5% year-over-year decline in average oil prices to $71.05 per barrel during the quarter. Nevertheless, the continued insider buying suggests strong confidence in the company's long-term outlook. $TPL benefits from increasing oil and gas production in the Permian Basin and rising natural gas prices, while also exploring diversification opportunities such as data center leases on its extensive landholdings. Analysts view the consistent insider buying as a reflection of belief in $TPL's intrinsic value from a long-term perspective. The company's vast land assets and royalty income model are expected to provide stable cash flows despite oil price volatility. However, investors should consider $TPL's high valuation (P/E of 71.42, P/S of 44.82) and performance volatility tied to oil price fluctuations. Additionally, the small scale of insider purchases might represent a long-term accumulation strategy rather than large-scale conviction. In conclusion, $TPL's insider trading patterns demonstrate insiders' faith in the company's fundamental value and long-term growth potential despite the significant stock price appreciation. Upcoming quarterly results, oil price trends, and the continuation of insider buying patterns will serve as important indicators for investors to monitor.

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