TPL

What Texas Pacific Land ($TPL) Insiders' 'Daily Buying' Pattern Reveals

07/11/2025 10:10

Texas Pacific Land Corporation ($TPL) is sending signals to investors that are far from ordinary. The buying patterns shown by director Murray Stahl and major shareholder Horizon Kinetics Asset Management over the past year transcend typical 'insider trading' activity. Texas Pacific Land is a unique energy company founded in 1888, owning approximately 880,000 acres in the Permian Basin, America's largest oil-producing region. Unlike typical oil and gas exploration companies, TPL operates a business model that requires minimal capital investment while generating stable returns through land leasing, royalty collection, and water services. Despite having only 111 employees, the company recorded $727.77 million in revenue and $460.2 million in net income over the past twelve months, achieving an extraordinary 63.24% net profit margin. The most notable aspect is the insider buying behavior. Director Murray Stahl has purchased shares almost daily from August 2024 through July 2025. He consistently bought 10-12 shares per day, sometimes smaller amounts, but maintained this pattern continuously. This isn't simple investing but demonstrates unwavering conviction in the company's long-term value. Particularly noteworthy is that his buying never stopped during both rising and falling markets. Whether the stock was at its peak around $1,700 in November 2024 or when it plummeted below $1,000 in April 2025, his purchases continued. Horizon Kinetics Asset Management's behavior is similar. This asset management firm, holding a 16% stake in TPL, continuously purchased shares from June 2024 through February 2025. Particularly from July to August 2024, they made small daily purchases. Their total purchase amounts reached millions of dollars. In contrast to this insider buying, selling was extremely limited. CFO Chris Steddum sold some shares in November 2024 and March 2025, and CAO Stephanie Buffington and Officer Micheal Dobbs made small sales. This suggests management believes the stock still has upside potential even at current price levels. The stock price movement validates the insiders' conviction. Starting around $580 in early June 2024, the stock surged nearly 200% to reach $1,723 in November. After some correction, it currently trades around $1,051, still maintaining substantial gains from the beginning of the year. Considering that concentrated insider buying occurred during July-August 2024 when the stock traded in the $720-$840 range, continued purchases at current prices reflect expectations for further upside. TPL's financial structure supports the insiders' confidence. The company operates with zero debt and holds $460.38 million in cash. With a return on equity (ROE) of 39.52% and return on assets (ROA) of 26.72%, it demonstrates overwhelmingly higher profitability than industry peers. The growth in water services business is particularly notable, providing a stable revenue source relatively less sensitive to oil and gas price fluctuations. However, investors should note some caution points. The current price-to-earnings ratio of 52.53x and price-to-sales ratio of 33.13x represent considerably high valuations. While this indicates the market highly values TPL's growth potential, it also suggests potential price correction pressure if performance falls short of expectations. Looking at the broader energy sector, conditions are mixed due to oil price volatility and supply concerns. However, TPL's unique business model of land ownership and royalty collection provides a relatively stable revenue structure compared to typical oil and gas companies. Particularly, rising real estate values in the Permian Basin and new business opportunities like data center leasing related to energy transition could serve as new growth drivers. The upcoming second-quarter earnings report on August 6th will be a key point to watch. This will confirm whether the insiders' continuous buying translates into actual performance improvement. Also, whether Murray Stahl's buying pattern continues or slows down at some point remains a market focus. In conclusion, TPL is a stock with long-term investment appeal based on its unique business model and strong financial structure. The insiders' unwavering buying conviction demonstrates strong confidence in the company's intrinsic value. However, considering the high valuation and energy sector volatility, investors need a cautious approach.