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Horizon Kinetics Asset Management buys shares of Texas Pacific Land Corp

Published 07/25/2024, 11:19 AM
TPL
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In a recent transaction, Horizon Kinetics Asset Management LLC, a significant shareholder in Texas Pacific Land Corp (NYSE:TPL), has expanded its position in the company. The asset management firm purchased additional shares, further investing in the Texas-based oil royalty trader.

On July 24, 2024, Horizon Kinetics Asset Management made a notable purchase of Texas Pacific Land Corp's common stock. The total transaction amounted to $2,429, with the firm acquiring 3 shares at a price of $809.81 each. Following this acquisition, Horizon Kinetics Asset Management holds a total of 1,085,077 shares in Texas Pacific Land Corp.

This transaction comes after Horizon Kinetics Asset Management's February 28, 2024, amendment to its Schedule 13D filing, where it reported beneficial ownership of 1,271,975 shares. Additionally, the filing detailed Murray Stahl's direct and indirect interests in the company, which include 2,474 shares and approximately 53,550 shares, respectively. It is worth noting that Mr. Stahl does not exercise investment discretion with respect to the issuer's securities.

Investors and market watchers often keep a close eye on buying and selling activities of major stakeholders, as these can be indicative of the firm's confidence in the company's prospects. The latest acquisition by Horizon Kinetics Asset Management underscores its ongoing commitment to Texas Pacific Land Corp as part of its investment portfolio.

Texas Pacific Land Corp, with its significant presence in the oil royalty trading industry, continues to be an integral part of Horizon Kinetics Asset Management's investment strategy. The firm's actions suggest a sustained belief in the value and potential of Texas Pacific Land Corp's business and operations.

In other recent news, Texas Pacific Land Corporation (TPL) has exhibited a strong Q1 performance for 2024, underpinned by a surge in water sales and produced water royalties. The company's consolidated revenues for Q1 2024 reached $174 million, with an adjusted EBITDA of $152 million and free cash flow of $115 million. TPL has also invested $20 million in desalination research, moving from the prototype stage to constructing a larger facility capable of processing 10,000 barrels per day.

As part of its recent developments, TPL formed Transmissive Water Services to manage desalination and water reuse efforts, which are currently in commercial negotiations with upstream operators. The company anticipates the strong performance in water sales to continue, bolstered by positive feedback from potential partners and regulators.

However, TPL acknowledges the challenges of reducing treatment costs for its desalination technology and the ongoing regulatory hurdles. Despite these, the company's water business has seen significant quarter-over-quarter revenue growth, driven by the demand for water-intensive simul-fracs. Lastly, TPL maintains a strong balance sheet, which supports ongoing investment and value creation initiatives.

InvestingPro Insights

In light of Horizon Kinetics Asset Management's increased stake in Texas Pacific Land Corp (NYSE:TPL), investors may find the following InvestingPro Data and InvestingPro Tips valuable for understanding the company's financial health and market position:

InvestingPro Data indicates that Texas Pacific Land Corp holds a market capitalization of $18.45 billion, reflecting its substantial size within the oil royalty trading sector. The company's impressive gross profit margin stands at 94.18% for the last twelve months as of Q1 2024, highlighting its ability to efficiently manage costs relative to revenue. Despite a slight dip in revenue growth by -1.06% during the same period, Texas Pacific Land Corp has experienced a robust revenue growth of 18.98% in Q1 2024 on a quarterly basis, suggesting potential for rebound and growth in the near term.

Investors may also be interested in the company's P/E Ratio, which is currently at 41.75, and adjusted P/E Ratio for the last twelve months as of Q1 2024 at 42.48. This indicates that the company is trading at a high earnings multiple, which could suggest market optimism about future earnings potential, but also implies a premium valuation that investors are currently willing to pay.

Among the InvestingPro Tips, Texas Pacific Land Corp is recognized for holding more cash than debt on its balance sheet and for its ability to sufficiently cover interest payments with its cash flows. These factors contribute to the company's financial stability and may reassure investors of its capacity to manage financial obligations effectively. Additionally, the company has maintained dividend payments for 11 consecutive years, with a dividend yield of 0.59% as of July 2024, and a dividend growth of 8.0% in the last twelve months as of Q1 2024, reflecting a commitment to returning value to shareholders.

For those interested in further analysis and additional InvestingPro Tips, such as the company's high return over the last year and its liquid assets exceeding short-term obligations, visit https://www.investing.com/pro/TPL. There are 17 additional InvestingPro Tips available to help investors make informed decisions. To access these insights and more, consider using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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