Horizon Kinetics Asset Management LLC has made a notable investment in Texas Pacific Land Corp (NYSE:TPL), a company prominent in the oil royalty trading industry. The asset management firm, which is a ten percent owner of Texas Pacific Land Corp, purchased additional shares of the company's common stock on August 1, 2024.
The transaction involved the acquisition of 3 shares at a price of $822.28 each, totaling approximately $2,466. This purchase has increased Horizon Kinetics' ownership to a substantial 1,085,095 shares of Texas Pacific Land Corp's common stock. The shares are held directly by Horizon Kinetics, indicating a strong vote of confidence in the future of Texas Pacific Land Corp.
Horizon Kinetics, with a business address on Park Avenue South in New York, is known for its significant investments and has previously reported its beneficial ownership of shares through an amendment to its Schedule 13D filed on February 28, 2024. The filing disclosed that Horizon Kinetics had beneficial ownership of 1,271,975 shares, outlining the direct and indirect interests of Murray Stahl, who does not exercise investment discretion with respect to the issuer's securities.
This latest transaction is part of Horizon Kinetics' ongoing investment strategy, demonstrating a continued commitment to Texas Pacific Land Corp. Investors and market watchers often look to such moves by significant stakeholders to gauge their sentiment and expectations regarding the company's performance and future prospects.
In other recent news, Texas Pacific Land Corporation (TPL) has reported a strong first quarter in 2024, with a significant growth driven by water sales and produced water royalties. The company's consolidated revenues reached $174 million, with adjusted EBITDA of $152 million and free cash flow of $115 million. TPL's focus on water desalination research is evident in their strategic $20 million capital investment to develop a cost-effective desalination method, which has now moved from prototype to a larger facility capable of processing 10,000 barrels per day.
The company has also formed a new entity, Transmissive Water Services, to manage desalination and water reuse efforts and is currently in commercial negotiations with upstream operators. Despite the technological advancements, TPL is yet to establish a firm commercial structure for its desalination and water reuse services. The company acknowledges the challenge of reducing treatment costs for its desalination technology and continues to search for alternative energy sources to lower operational costs.
These are among the recent developments at TPL, which also include the formation of a strategic acquisition committee to evaluate new projects. The company anticipates that low natural gas prices may affect gas realizations in the upcoming second quarter but maintains a strong balance sheet that supports ongoing investment and value creation initiatives. Despite the potential challenges, TPL's water business has seen significant quarter-over-quarter revenue growth, driven by the demand for water-intensive simul-fracs, providing a competitive advantage in the Permian Basin.
InvestingPro Insights
In light of Horizon Kinetics Asset Management LLC's recent investment in Texas Pacific Land Corp (NYSE:TPL), several key metrics from InvestingPro provide additional context to the company's financial health and market performance. With a market capitalization of $17.8 billion, Texas Pacific Land Corp stands out in the oil royalty trading industry. The company's impressive gross profit margin, which InvestingPro has reported to be 94.18% for the last twelve months as of Q1 2024, underscores its ability to efficiently manage its cost of sales relative to revenue.
An InvestingPro Tip notes that Texas Pacific Land Corp has maintained dividend payments for 11 consecutive years, which may be of particular interest to income-focused investors. The company's dividend yield as of mid-2024 stands at 0.57%, with a dividend growth of 8.0% over the last twelve months, reflecting a stable return to shareholders.
Investors should also note the company's strong share price performance, with a one-year total return of 72.17% as of mid-2024. This robust return, alongside the fact that Texas Pacific Land Corp's price is at 90.58% of its 52-week high, suggests a bullish sentiment among investors and potentially indicates room for growth.
For those interested in a deeper dive into Texas Pacific Land Corp's financials and market performance, InvestingPro offers additional tips. In fact, there are 16 more InvestingPro Tips available, which can provide further insights into the company's valuation multiples, profitability, and analysts' predictions for the year.
For detailed insights and additional InvestingPro Tips on Texas Pacific Land Corp, interested parties can visit https://www.investing.com/pro/TPL. These tips can serve as a valuable resource for investors considering an investment in the company or looking to understand the implications of Horizon Kinetics' recent share acquisition.
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