In a recent transaction, Horizon Kinetics Asset Management LLC has increased its stake in Texas Pacific Land Corp (NYSE:TPL), a company operating in the oil royalty trading sector. The asset management firm completed the purchase of shares on July 1, 2024, at a price of $733.22 per share, amounting to a total investment of $2,199.
The buy transaction reflects Horizon Kinetics' continued interest in Texas Pacific Land Corp, as the company acquired an additional 3 shares, thereby increasing its total holdings to 1,085,046 shares. This move further cements the firm's position as a significant shareholder in the Texas-based corporation.
The disclosed transaction was conducted directly by Horizon Kinetics, as indicated in the recent SEC filing. It's worth noting that on February 28, 2024, Horizon Kinetics had reported a beneficial ownership of 1,271,975 shares, with Murray Stahl having a direct interest in 2,474 shares and an indirect interest in approximately 53,550 shares. However, Mr. Stahl does not exercise investment discretion with respect to the securities of the issuer.
Investors and market watchers often look to the buying and selling activities of major stakeholders like Horizon Kinetics to gauge the confidence and insider perspective on the company's prospects. With this latest acquisition, Horizon Kinetics has demonstrated a tangible commitment to its investment in Texas Pacific Land Corp, a detail that may be of interest to those following the company's stock performance.
In other recent news, Texas Pacific Land Corporation (TPL) reported strong first-quarter earnings for 2024, driven by significant growth in water sales and produced water royalties. The company's consolidated revenues reached $174 million, with an adjusted EBITDA of $152 million and free cash flow of $115 million. TPL has also invested $20 million in a promising desalination method through fractional freezing, which has now moved from prototype to a larger facility capable of processing 10,000 barrels per day.
Furthermore, TPL has created Transmissive Water Services to manage its desalination and water reuse efforts, currently in commercial negotiations with upstream operators. The company's commitment to innovation is also evident in its efforts to reduce operational costs and its formation of a strategic acquisition committee to evaluate new projects.
However, TPL anticipates that low natural gas prices may affect gas realizations in the upcoming second quarter. Challenges also remain in reducing treatment costs for its desalination technology and overcoming regulatory hurdles. Despite these challenges, TPL's water business continues to report significant revenue growth, positioning the company as a key player in providing large volumes of water across the Permian Basin.
InvestingPro Insights
As Horizon Kinetics Asset Management LLC bolsters its stake in Texas Pacific Land Corp (NYSE:TPL), a deeper look into the company's financials through InvestingPro reveals a robust financial position and market performance. Texas Pacific Land Corp holds more cash than debt, a reassuring signal of financial stability and a key InvestingPro Tip that may have influenced Horizon Kinetics' decision. Additionally, the company boasts an impressive gross profit margin of 94.18% for the last twelve months as of Q1 2024, which underscores its efficiency in generating income relative to the costs incurred.
InvestingPro Data further highlights Texas Pacific Land Corp's market valuation and performance. With a market capitalization of $16.72 billion, the company trades at a high earnings multiple, with a P/E ratio of 38.53. This indicates investor confidence in future growth, albeit at a premium compared to industry peers. Moreover, the company has demonstrated a strong return over the last year, with a price total return of 68.77%, reflecting a bullish trend in its stock value.
For investors interested in a deeper analysis, InvestingPro offers a comprehensive set of additional tips, including a look at the company's ability to cover interest payments with its cash flows, its consistent dividend payments for 11 consecutive years, and its liquid assets exceeding short-term obligations. To access these insights and more, visit https://www.investing.com/pro/TPL and use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. With 17 additional InvestingPro Tips available, investors can gain a more nuanced understanding of Texas Pacific Land Corp's financial health and market position.
Such data-driven insights can be invaluable for stakeholders and potential investors as they evaluate the company's prospects and the strategic moves of significant shareholders like Horizon Kinetics.
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