Are Texas Pacific Land Corporation (TPL) stocks a safe investment avenue?

LRT Capital Management, an investment management firm, has released its October 2022 Letter to Investors. A copy of it can be downloaded here. October results were excellent and its LRT Economic Moat strategy returned 7.38%. Additionally, you can check out the fund’s top 5 holdings for its top picks in 2022.

LRT Capital discussed stocks like Texas Pacific Land Corporation (NYSE:DPT) in the letter to investors. Based in Dallas, Texas, Texas Pacific Land Corporation (NYSE: TPL) 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’s (NYSE:TPL) one-month return was 28.10% and its shares have gained 105.09% of their value over the past 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 letter to investors:

“Returning readers will know that we rarely invest in commodity companies. However, there are periods in the market when commodity-based companies significantly outperform broad indices. Therefore, to balance the portfolio, we have long been looking for a competitively advantageous business in the field of commodities. Texas Pacific Land Corporation (NYSE:TPL), meets this criteria. Formed from assets of once-bankrupt railroads, TPL controls the largest acreage of land in the Permian Basin – the center of America’s shale oil industry. The company has two primary sources of revenue: 1) royalties from oil and gas extracted on its properties – essentially a free call option on future oil prices and production; and 2) a water company that develops water resources and sells services to the hydraulic fracturing industry. We view 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 flow to pay dividends and buy back stock.”

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. According to our database, 20 hedge fund portfolios were held by Texas Pacific Land Corporation (NYSE:TPL) at the end of the third quarter, up from 22 in the prior quarter.

We discussed Texas Pacific Land Corporation (NYSE:TPL) in another article and shared Wedgewood Partners’ views on the business. Additionally, please see our Letters to Hedge Fund Investors Q3 2022 page for more letters from hedge fund investors and other leading investors.

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Disclosure: none. This article originally appeared on Insider Monkey.