Is Texas Pacific Land Corporation (TPL) Stock a Safe Place to Invest?

LRT Capital Management, an investment management company, released its October 2022 Investor Letter. A copy of it can be downloaded here. Results in October were excellent, with the LRT Economic Moat strategy returning 7.38%. Additionally, you can check out the fund’s top 5 holdings for its best picks in 2022.

LRT Capital discussed stocks like Texas Pacific Land Corporation (NYSE:TPL) in the investor letter. Texas Pacific Land Corporation (NYSE:TPL), headquartered in Dallas, Texas, is engaged in land and resource management, water services and business operations. On November 16, 2022, Texas Pacific Land Corporation (NYSE:TPL) stock closed at $2,626.06 per share. Texas Pacific Land Corporation (NYSE:TPL)’s monthly return was 28.10% and its shares are up 105.09% over the past 52 weeks. Texas Pacific Land Corporation (NYSE:TPL) has a market cap of $20.232 billion.

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

“Longtime readers will know that we rarely invest in resource companies. However, there are periods in the market when commodity-based companies far outperform the broad indices. So we’ve been looking for a balance in the portfolio for a long time – a competitive company in the commodities space, we’re convinced of that Texas Pacific Land Corporation (NYSE:TPL), meets this criterion. Founded from assets of formerly bankrupt railroads, TPL controls the largest tract of land in the Permian Basin — the center of the US shale oil industry. The Company has two primary sources of revenue: 1) royalties from oil and gas produced on its properties – essentially a no-cost option to purchase future oil prices and production; and 2) a water company that 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 company with 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 buy back stock.”

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 the top 30 most popular hedge fund stocks. According to our database, 20 hedge fund portfolios held Texas Pacific Land Corporation (NYSE:TPL) at the end of the third quarter, up from 22 in the previous quarter.

We talked about Texas Pacific Land Corporation (NYSE:TPL) in another article and shared Wedgewood Partners’ views on the company. For more investor letters from hedge funds and other leading investors, visit our Hedge Fund Investor Letters Q3 2022 page.

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Disclosure: None. This article was originally published on Insider Monkey.

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