written by reader Is it safe yet to get back into TPL (Texas Pacific Land Trust)? (A question for those interested in royalties and could use a break from 5G, AI and IoT stocks.)

By bunion132, September 4, 2019

TPL used to be THE bright spot in the rather depressed or volatile Energy Sector. All came crashing down when the bitter feud between its trustees escalated to a blitzkrieg of derogatory remarks mailed to shareholders by both sides around proxy voting time. Due to my tiny position in the stock, I ignored the noise and got out like many a shareholder hurt by the in-fighting.
To be honest, I can’t say I care about who won this fight (if any) but if anybody here understands the results or consequences thereof and is willing to share their thoughts, that would be great! With all the tech talk floating around, I think TPL is back to flying under the radar, merely managing land and collecting royalites on oil & gas. The stock is currently down around 26% from its 52-week high.
Is it worth rebuying?

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Travis Johnson, Stock Gumshoe
September 5, 2019 9:51 am

I sympathize with your interest in getting away from 5G and AI!

Haven’t ever owned that one, sadly, and I haven’t followed the details of the dispute — but they had huge leverage to the recovery in oil prices for a few years, and the massive ramp-up in Permian production, so over the past year the stock has pretty much just been a bet on the oil price. Here’s TPL charted against the spot price of WTI crude for the last 12 months… which tells me that it’s tracking crude just fine, so if you think crude is going up then TPL will probably go up, too, but it’s not showing any persistently strong leverage to the oil price this year like it did in past years. Sometimes it’s important not to overthink too much — will oil go up, and will TPL provide levered exposure to oil again if it does? If you answer those questions you have your decision. Unfortunately, I don’t know the answer to either.

TPL Chart

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