TPL

Texas Pacific Land ($TPL) Director's 300-Day Buying Spree Signals Confidence... Opportunity at 35% Off Highs?

06/17/2025 04:22

Texas Pacific Land Corp ($TPL) operates a unique business model owning approximately 870,000 acres in Texas's Permian Basin, generating stable cash flows through oil and gas royalties, water services, and land leasing without direct energy production. Founded in 1888, this $29 billion market cap company was added to the S&P 500 index in 2024, reflecting its growing significance in the energy infrastructure space. The most striking aspect is Director Murray Stahl's extraordinarily consistent purchasing pattern. From August 2024 through June 2025, he has purchased shares on virtually every trading day, initially buying 12 shares daily, then switching to 10 shares. His total purchases amount to hundreds of thousands of dollars. Since November 21, 2024, he has operated under a 10b5-1 automated trading plan, demonstrating systematic confidence in the company's prospects. Horizon Kinetics Asset Management LLC has similarly maintained aggressive purchasing, beginning in June 2024 and accumulating 3,578,173 shares. With Murray Stahl serving as Chairman and CEO of Horizon Kinetics, this represents coordinated buying through both personal and institutional channels. Counterbalancing these purchases were sales by senior executives. CFO Chris Steddum sold 1,100 shares in November 2024 and March 2025, while CAO Stephanie Buffington sold 210 shares in November 2024. However, these appear to be routine RSU (Restricted Stock Unit) exercises rather than discretionary selling. The stock's price movement has been extraordinarily volatile. Starting at $580 in June 2024, shares surged nearly 3x to $1,723 by November 22, then corrected to the $1,100s in mid-December. After recovering to the $1,400s in January 2025, shares have settled back around $1,100. Despite this volatility, the stock has gained 48.47% over the past year, significantly outperforming the S&P 500's 11.07% return. Texas Pacific Land's financial health is exceptionally strong. The company reported $706 million in 2024 revenue and $454 million in net income while maintaining zero debt. Cash holdings approximate $460 million, with profit margins reaching 63%. While the P/E ratio of 55x appears elevated, it reflects the unique asset structure and growth potential of the land-based royalty model. The investment implications are compelling but complex. The relentless insider buying signals strong conviction about long-term prospects, particularly notable given that Stahl continued purchasing even at the $1,700 highs. This suggests confidence extends beyond opportunistic buying during price declines. However, risks remain significant. High valuation multiples and extreme volatility create substantial downside potential. Indirect exposure to oil price fluctuations and speculative ventures into AI data centers and bitcoin mining add uncertainty. At current levels around $1,100, shares trade approximately 35% below recent highs, potentially offering an attractive entry point for long-term investors. The company's unique position in the Permian Basin, combined with U.S. energy independence policies and ongoing basin development, suggests substantial strategic value. Murray Stahl's unwavering buying pattern provides a powerful vote of confidence, though investors must weigh this against valuation concerns and inherent commodity exposure.

You can receive notifications when news is published.