Is Index Investing Turning Into A Bubble? This Billion Dollar Hedge Fund Thinks So (And Has The Data To Prove It)

 Texas Pacific Land Trust (NYSE:TPL)

– Shares Held By Horizon Kinetics (as of September 30): 1.68 Million

– Value of Holding (as of September 30): $402.82 Million

Like it did with its stake in Associated Capital, Horizon Kinetics also increased its stake in Texas Pacific Land Trust (NYSE:TPL) during the final month of 2016, albeit marginally, by 17,666 shares. Texas Pacific Land Trust (NYSE:TPL) is Horizon Kinetics’ largest holding, amassing more than 15% and in some cases 20% of the value of some of the firm’s individual account strategies and fund formats. It is also one of the oldest holdings of the firm.

Despite the steep decline in crude oil prices, shares of Texas Pacific have appreciated by over 250% since the beginning of 2015, during which time its revenue from oil royalties and oil-related land leases and sales have risen by 150%. Moreover, the company has bought back 10% of its float since then. Apart from these factors, one of the main reasons that Horizon Kinetics is overweight the company is because Texas Pacific’s business and its stock are not co-related to the broader market, thereby providing both diversification and optionality. For its most recent quarter, Texas Pacific Land Trust reported EPS of $1.37 on total income of $17.57 million, compared to EPS of $1.10 on revenue of $14.72 million that it had reported for the same quarter of the previous year.

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