TPL

Insiders Show Conviction: Texas Pacific Land ($TPL) Directors Continue Steady Stock Purchases Despite Oil Price Headwinds

05/22/2025 14:55

Major shareholders and directors at Texas Pacific Land Corp ($TPL) have been showing consistent buying patterns, with Board Member Murray Stahl's persistent accumulation standing out as particularly notable. Director Stahl has been steadily purchasing small quantities of stock almost daily throughout the past year. His buying remained consistent whether the stock was surging from around $580 in June 2024 to over $1,700 in November 2024, or pulling back to current levels around $1,355. He typically bought 10-12 shares at a time, with many purchases executed pursuant to a Rule 10b5-1 plan adopted on November 21, 2024. Horizon Kinetics Asset Management LLC, a major shareholder, has exhibited a similar buying pattern. Interestingly, Stahl serves as Chairman and CEO of Horizon Kinetics, which holds approximately 16% stake in $TPL, making it a significant institutional investor. Texas Pacific Land operates with a business model quite different from typical energy companies. As a land company owning approximately 900,000 surface acres and 207,000 net royalty acres, it doesn't directly produce oil or gas but instead collects royalty revenue. This characteristic provides a more stable business model that's less directly impacted by commodity price volatility. With a market capitalization of approximately $29 billion, $TPL achieved a significant milestone in November 2024 when it was added to the S&P 500 index. Interestingly, the stock declined 4.6% on its first day of trading in the S&P 500, though by that point, it had already gained over 300% year-to-date. Recent performance, however, has been somewhat mixed. In Q1 2025 results announced in May, net income increased 5.4% year-over-year to $120.7 million, but adjusted core profit of $169.4 million missed Wall Street's estimate of $180 million. This shortfall was attributed to a 7.5% decline in oil prices to $71.05 per barrel, though production levels increased. It's worth noting that there have been occasional small sales by executives. CAO Stephanie Buffington sold 210 shares on November 13, 2024, while CFO Chris Steddum sold 350 shares on November 14, 2024, and an additional 750 shares on March 14, 2025. Officer Micheal Dobbs also sold 1,150 shares on March 13, 2025. However, these sales appear to be isolated transactions rather than a sustained pattern. $TPL is also exploring diversification beyond traditional energy revenue. The company is investigating opportunities for data center leases on its extensive land holdings, which could provide additional growth opportunities as demand for digital infrastructure continues to increase. Considering all these factors, the consistent buying by Stahl and Horizon Kinetics suggests strong conviction in $TPL's long-term prospects. This is particularly notable given that oil price declines are impacting short-term results. These insider transaction patterns can provide important signals for investors. In the context of ongoing volatility in the energy sector, $TPL's differentiated business model and insiders' confidence may be interpreted as positive signals for long-term investors. However, given the current high valuation (P/E of approximately 67.8) and recent stock pullback, investors should be prepared for short-term volatility.

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