TPL

Texas Pacific Land ($TPL) Director's 'Daily Buying' Continues Despite 40% Plunge as Major Shareholder Maintains Steady Purchases

06/30/2025 10:49

As Texas Pacific Land ($TPL) trades nearly 40% below its November highs of around $1,700, one board member's 'almost daily' buying spree is capturing investor attention. Is this persistent purchasing pattern a strong bottom signal, or merely individual conviction? Texas Pacific Land operates a unique business model owning approximately 870,000 acres in Texas's Permian Basin, generating oil and gas royalties plus water services revenue. Founded in 1888, the company profits from production royalties without direct drilling involvement, creating a capital-efficient model. With a $29 billion market cap, TPL holds a distinctive position within the energy sector. Most striking is Director Murray Stahl's buying pattern. His purchases began in August 2024 and continued almost daily through June 2025. Notably, he maintained buying even as shares declined from the $1,400s to recent $1,000 levels, demonstrating conviction beyond mechanical purchasing. While Stahl disclaims investment discretion over TPL securities, his role as Chairman and CEO of Horizon Kinetics Asset Management makes his personal conviction significant. Major shareholder Horizon Kinetics Asset Management has also bought consistently since June 2024. Holding 16% of TPL, they've maintained steady small purchases regardless of market volatility, indicating long-term confidence in TPL's intrinsic value. However, some executive selling has occurred. In November 2024, CFO Chris Steddum sold $127 million worth of shares, and in March 2025, Officer Micheal Dobbs sold $1.46 million. This selling coincided with the stock's decline from peaks, creating concern among some investors. TPL's financial health remains robust. For 2025 H1, the company posted $727.66 million revenue, 63.24% net margin, and 76.69% operating margin. With zero debt and $460.38 million cash, TPL maintains financial stability against any market shock. This reflects the strength of its royalty-based business model. TPL's S&P 500 inclusion in November 2024 represents a notable change. Despite a 4.6% first-day decline, this appears to be temporary technical adjustment. S&P 500 inclusion should drive additional institutional inflows, providing long-term positive stock impact. Evaluating TPL's investment appeal at current levels reveals mixed signals. Positively, Stahl's and Horizon Kinetics' persistent buying suggests potential undervaluation. The Permian Basin's long-term growth potential and TPL's monopolistic position remain valid. Expansion in water services, data centers, and renewable projects offers additional growth drivers. Concerns include high valuation multiples: 52.8x P/E and 20.1x P/B remain burdensome. Oil price volatility and potential Permian Basin production slowdown pose risks. Executive selling may reflect insider information access. Investors should monitor Murray Stahl's buying pattern changes. If his daily purchases cease or diminish significantly, this could signal important shifts. Conversely, continued buying during further declines would provide strong bottom confirmation. Short-term, support formation around $1,000 is crucial. Breaking below could enable further decline toward $900s, though current insider buying intensity should limit major drops. Long-term, energy market recovery combined with TPL's unique growth drivers should support price appreciation. In conclusion, TPL currently balances high valuation concerns against strong insider buying conviction. Risk-tolerant investors might consider dollar-cost averaging at current levels, while conservative investors should await further price adjustment and valuation burden relief.