TPL

Texas Pacific Land ($TPL) Insiders Continue Steady Buying Despite 128% Stock Surge

05/19/2025 16:41

Texas Pacific Land Corp ($TPL) has seen its shares surge over 128% in the past year, drawing attention to persistent insider buying, particularly by board member Murray Stahl and major shareholder Horizon Kinetics Asset Management LLC. $TPL, a large-cap land and resource management company with approximately 873,000 acres in Texas's Permian Basin, was added to the S&P 500 index in November 2024. With a market capitalization of around $29 billion, the company generates revenue primarily from oil and gas royalties and water services. What's noteworthy is that insider buying patterns have remained consistent despite the stock's dramatic rise. Director Murray Stahl has steadily purchased small amounts of shares almost daily from August 2024 through May 2025. Initially buying 12 shares at a time when the stock traded in the $800 range, he adjusted to 10 shares after prices exceeded $1,000, but maintained his buying frequency. As recently as May 16, 2025, he purchased 10 shares for approximately $14,202. Horizon Kinetics has displayed a similar pattern, consistently purchasing small quantities of shares from June 2024 through January 2025. Notably, they continued buying even during the stock's surge in November 2024, purchasing 3 shares when the price reached $1,645 on November 22. In contrast, key executives including CFO Chris Steddum and CAO Stephanie Buffington have periodically sold shares. Steddum sold 350 shares at $1,340 per share on November 14, 2024, and an additional 750 shares for approximately $1 million on March 14, 2025. Buffington sold 210 shares for about $290,000 on November 12, 2024. These contrasting insider trading patterns offer interesting insights. Executive sales appear to be portfolio management decisions, particularly taking partial profits after significant price appreciation. Meanwhile, the consistent buying by the director and major shareholder demonstrates strong confidence in the company's long-term value. $TPL's business model differs from traditional oil and gas companies. Rather than directly drilling for oil, it generates revenue through royalties from its vast Permian Basin lands and water management services. This structure reduces exposure to oil price volatility while still benefiting from growth in the oil and gas industry. Financially, $TPL exhibits exceptional health with zero debt and $460 million in cash as of Q1 2025. Its profit margin of 63.24% and return on equity (ROE) of 39.52% rank among the industry's best. However, in its recently reported Q1 2025 results, adjusted core profit reached $169.4 million, falling short of Wall Street's $180 million estimate due to a 7.5% decline in oil prices. Particularly noteworthy is $TPL's valuation. Its current P/E ratio of 69.72 significantly exceeds the energy sector average, suggesting investors highly value its unique business model and growth potential. However, this premium valuation also implies potential for future price corrections. $TPL's stock has gained approximately 150% from June 2024 through May 2025. The stock surged notably in November 2024 with its S&P 500 inclusion, experienced a temporary sharp decline in early April 2025, and has recently stabilized around $1,430. Insider trading patterns often provide valuable indicators of insiders' perspectives on a company's future. In $TPL's case, the consistent buying by the director and major shareholder reflects belief in the company's long-term growth prospects, while executive sales appear to be personal portfolio adjustments. Importantly, insider transactions have largely followed 10b5-1 plans, indicating they were pre-planned rather than based on material non-public information. Murray Stahl specifically executed trades according to a 10b5-1 plan established on May 14, 2024. Key risk factors for $TPL include oil and gas price volatility and high valuation. The 7.5% decline in oil prices during Q1 2025 impacted the company's results, and the current elevated P/E ratio may limit future stock growth. Nevertheless, persistent insider buying, robust financial structure, and a unique business model present positive signals for long-term investors. The company's debt-free status and strong cash generation capability should provide stability even during economic downturns. To predict $TPL's future stock performance, investors should monitor insider trading patterns alongside oil and gas market trends, Permian Basin production changes, and growth in the company's water business. Any shifts in the buying patterns of Murray Stahl and Horizon Kinetics could serve as significant indicators.

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