We recently published an article titled Jim Cramer Discussed 10 Stocks That Can Do Well in December.In this article, we are going to take a look at where Texas Pacific Land Corporation (NYSE:TPL) stands against the other stocks that can do well in December according to Jim Cramer.
Jim Cramer, the host of Mad Money, recently shared a list of ten stocks he believes will perform well in December. He pointed out that stocks that do well in November tend to continue their strong performance into the final month of the year.
Cramer explained that the beginning of a new month brings attention to the previous month’s performance, and with that, a significant influx of money flows into the market. This money, he said, tends to validate the moves of the largest stocks, creating a cycle where money is immediately put to work, often benefiting the Magnificent Seven.
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Cramer also highlighted a common pattern at the end of the year, noting that people tend to make contributions to their retirement accounts when the year is going well. He emphasized that this trend is already visible in the market. When asked why a strong November often translates into a positive December, Cramer pointed to the mechanics of money management. He said that this pattern isn’t new for him, elaborating:
“Before I started my Charitable Trust more than two decades ago, I ran a hedge fund. I was always looking for an edge, and one of the most reliable patterns I found is that, when December rolls around, you mimic the biggest winners of November.”
Cramer recalled how, during his hedge fund days, he would focus on the top-performing stocks of November, buying heavily into those picks and letting them continue to perform through the end of the year. He remarked that this approach has proven to be successful year after year.
In addition to the stocks he recommended, Cramer also noted a category of stocks tied to travel. He mentioned that travel-related industries, including airlines and cruise ships, were particularly strong in November and could continue to show promise in December.
“Now, there are other[s] underneath this list, ones that involve traveling. To me, that means you could buy anything connected to travel, including the airlines… Cruise ships work… But the bottom line: If you want to know what I think could do best in the month of December, or simply what worked best in the month of November, so now you got your marching orders and I say (buy, buy, buy).”
Our Methodology
For this article, we compiled a list of 10 stocks that were discussed by Jim Cramer during a recent episode of Mad Money on December 2. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A pipeline running through a rural landscape, a reminder of the companies oil and gas Royalty Interest.
Texas Pacific Land Corporation (NYSE:TPL)
Number of Hedge Fund Holders: 20
Cramer noted that during Trump’s previous term, oil stocks underperformed. He also mentioned how he waited for Texas Pacific Land Corporation (NYSE:TPL) stock to pull back, which did not happen.
“Not long ago we covered Texas Pacific Land Corp, a new addition to the S&P 500, that owns more than 800,000 acres of land in the oil-rich Permian Basin. Now this one’s a holdover from a 19th century railroad bankruptcy. All it does is take in money. Even though they don’t own the mineral rights, they own the land, which means you need to pay them if you want to drill… Nothing like an oil stock after Trump gets elected though but be careful. The oils underperformed during the last Trump administration because there was too much drilling. It could happen again. Although when I profiled Texas Pacific not that long ago, I told you it was worth waiting for a pullback. The pullback never came. It just kept going straight up.”
Texas Pacific (NYSE:TPL) focuses on land and resource management, as well as water services, alongside leasing land and selling materials. In the third-quarter earnings report, the company reported a consolidated net income of $106.6 million and an adjusted EBITDA of $144.1 million. It achieved record royalty production of 28.3 thousand Boe per day and made two notable acquisitions: mineral interests spanning 4,106 net royalty acres in the Delaware Basin, valued at $120.3 million, and approximately 4,120 surface acres in the Midland Basin for $45.0 million.
Tyler Glover, Texas Pacific’s (NYSE:TPL) President and Chief Executive Officer, emphasized that the surface holdings are highly valuable assets, noting that the company has secured numerous contracts in recent years. He highlighted that the company is in the process of developing over 700 megawatts of solar energy, as well as seven utility-scale battery projects.
In addition, the company operates four Bitcoin mines, totaling 78 megawatts of active power, with another 50 megawatts in development. Glover expressed confidence in the company’s position, stating that it is well-positioned to provide land and water solutions as new opportunities outside of traditional oil and gas emerge in West Texas.
Overall TPL ranks 10th on our list of the stocks that will do well in December according to Jim Cramer. While we acknowledge the potential of TPL as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TPL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.