Opinions
Kevin Simpson
Texas Pacific Land Trust
TPL-N
PARTIAL SELL
Nov 08, 2024
$1374.060
Stock price when the opinion was issued
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TOP PICK
They are the largest holder of land in the state of Texas. They got their land before oil was discovered. They get royalties for oil taken off their land as well as grazing rights. They just put in a new solar installation and they sell water from their land to fracking companies and then charge them to clean it after they have used it. They are converting from a trust to a corp. It is not a call on where oil goes although there is some exposure. (Analysts’ price target is $937.00)
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BUY ON WEAKNESS
It was a past top pick in January. He got stopped out of this. He still likes it. They are converting from a trust into a corporation, which should attract more investors. They lease out their land for shale exploration and lease water rights. Are also doing solar installations. Have very low operating expenses. They can weather this pandemic, but there could be further weakness in oil. You can nibble away at this at around 14x earnings. Nice dividend. He's buying back in on a dip in the $400s.
PAST TOP PICK
PAST TOP PICK
(A Top Pick Jan 20/20, Up 7%) A streamer play where they rent land to oil/gas explorers and don't extract it themselves. They're at the mercy of oil prices. He got stopped out of this, though if he were to re-enter oil, this would be one of the two (along with Parex).
BUY ON WEAKNESS
He was stopped out in March 2020. Second-largest landholder in Texas. A royalty play for water, fracking, oil, solar panels, etc. The only oil/gas company he'd be interested in. High ROIC, asset light. Concerns about their governance. Massive moat. He'd be interested below $1K. Future is quite bright.
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He trimmed this, after buying it last month when it was up 100% this year. He made 40% in a couple weeks. It could go higher. It's a royalty play on mineral rights, natural gas, oil and water.