TPL

Texas Pacific Land($TPL) Director Murray Stahl's Unwavering Daily Buying Streak Continues For 3 Months Despite Price Volatility, Signaling Confidence In Debt-Free Financial Strength

05/23/2025 16:44

Texas Pacific Land Corp ($TPL) director Murray Stahl has been demonstrating a remarkable pattern of consistent stock purchases almost daily from March through May 2025. This steady buying activity signals strong insider confidence in the company's value despite recent price volatility. From May 1 to May 22, 2025, Stahl purchased 10 shares almost daily, continuing his consistent buying pattern that began earlier in 2025. Notably, he has maintained purchases across various price points ranging from $1,300 to $1,420, suggesting a focus on long-term value rather than short-term price movements. Texas Pacific Land Corp is one of America's largest landowners, controlling approximately 207,000 net royalty acres in the Permian Basin of Texas. The company operates a unique business model generating revenue through oil and gas royalties, easement and rental income, and growing water services. This large-cap company, with a market capitalization of approximately $29 billion, was added to the S&P 500 index in November 2024. The stock has shown impressive appreciation over the past year. From around $585 in early June 2024, it soared to over $1,700 in November 2024, before settling at current levels around $1,300. Its one-year return of 109% substantially outperforms the S&P 500's 10.12% during the same period. However, the stock has shown some volatility in recent weeks, rising from about $1,350 in early May to $1,430 mid-month before falling to around $1,280 recently. Examining the broader picture of insider buying reveals even more interesting patterns. Murray Stahl is also a key figure at Horizon Kinetics Asset Management LLC, which is a major shareholder owning approximately 16% of TPL. Horizon Kinetics has also been steadily purchasing TPL shares from early 2024 through early 2025. Most of Stahl's purchases have been made pursuant to a Rule 10b5-1 plan, indicating pre-scheduled trades to avoid any appearance of insider trading. These consistent insider purchases take on added significance when coupled with the company's solid financial position. TPL is unique in having zero debt while maintaining approximately $460 million in cash. Its return on equity (ROE) of 39.52% and remarkable profit margins exceeding 63% demonstrate how efficiently the company operates. However, investors should note some warning signs in recent results. In its Q1 2025 earnings announced in early May, TPL reported revenue of $196 million (up 13%) and net income of $120.7 million (up 5.4%). However, profit margins declined slightly from 66% to 62% year-over-year, and the company's adjusted core profit missed Wall Street estimates. This was primarily attributed to oil prices falling 7.5% to $71.05 per barrel during the first quarter. Nevertheless, it's impressive that the company still achieved revenue and net income growth despite the oil price decline. This demonstrates that TPL's business model is more stable than pure-play energy companies. Rather than producing oil directly, the company generates revenue from royalties, land usage fees, and water services, providing diversified income streams that buffer against oil price volatility. While there have been limited stock sales by some CFOs and officers (occurring in November 2024 and March 2025), these are relatively small compared to the consistent buying volume from Stahl and Horizon Kinetics. Moreover, these sales likely represent personal financial planning or diversification. The high P/E ratio of 63.97 reflects TPL's premium valuation, but this may be justified considering the company's unique asset base, zero debt, and high profitability. Furthermore, the fact that insiders like Murray Stahl continue to buy steadily even at current prices suggests they still believe in the company's long-term value. For investors, TPL offers a unique investment opportunity within the energy sector. The land royalty model provides exposure to energy industry growth with lower risk than direct oil producers. While there may be short-term price volatility, Murray Stahl's consistent buying serves as a strong vote of confidence for long-term investors.

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