March 4, 2024

Tricia Oak

Business & Finance Excellency

Is Texas Pacific Land Corporation (TPL) Stock a Safe Investment Avenue?

LRT Capital Management, an investment management firm, released its October 2022 investor letter. A copy of the same can be downloaded here. The results in October were excellent, and its LRT Economic Moat strategy returned 7.38%. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.

LRT Capital discussed stocks like Texas Pacific Land Corporation (NYSE:TPL) in the investor letter. Headquartered in Dallas, Texas, Texas Pacific Land Corporation (NYSE:TPL) is in the business of land and resource management and water services and business operations. On November 16, 2022, Texas Pacific Land Corporation (NYSE:TPL) stock closed at $2,626.06 per share. One-month return of Texas Pacific Land Corporation (NYSE:TPL) was 28.10% and its shares gained 105.09% of their value over the last 52 weeks.  Texas Pacific Land Corporation (NYSE:TPL) has a market capitalization of $20.232 billion.

LRT Capital made the following comment about Texas Pacific Land Corporation (NYSE:TPL) in its October investor letter:

“Long time readers will know that we rarely invest in commodity businesses. However, there are periods in the market where commodity-based businesses outperform the broad indexes by a wide margin. Therefore, to have balance in the portfolio, we have long searched for a competitively advantaged company in the commodity space. We believe that Texas Pacific Land Corporation (NYSE:TPL), meets that criterion. Formed out of assets of formerly bankrupt railroads, TPL controls the largest acreage of land in the Permian basin – the center of the US shale oil industry. The company has two main sources of income: 1) royalties from oil & gas extracted on its properties – essentially a free call option on future oil prices and production; and 2) a water business which develops water resources and sells services to the fracking industry. We see TPL as an effective way to diversify the portfolio into a commodity exposed business that has a history of smart capital allocation and low risk of financial distress during periods of low oil prices. The company has no debt, and $281 million in cash. The company uses most of its cash flows to pay dividends and repurchase shares.”

Texas Pacific Land Trust

Texas Pacific Land Trust

Image: Texas Pacific Land Trust Office/Credit: Google Maps

Texas Pacific Land Corporation (NYSE:TPL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held Texas Pacific Land Corporation (NYSE:TPL) at the end of the third quarter which was 22 in the previous quarter.

We discussed Texas Pacific Land Corporation (NYSE:TPL) in another article and shared Wedgewood Partners’ views on the company. In addition, please check out our hedge fund investor letters Q3 2022 page for more investor letters from hedge funds and other leading investors.


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Disclosure: None. This article is originally published at Insider Monkey.