LRT Capital Management, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. A return of +30.47% was recorded by the LRT Economic Moat strategy year-to-date, putting its 24-month return to +4.34%. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
LRT Capital Management, in its Q4 2021 investor letter, mentioned Texas Pacific Land Corporation (NYSE: TPL) and discussed its stance on the firm. Texas Pacific Land Corporation is a Dallas, Texas-based land holding company with a $9.5 billion market capitalization. TPL delivered a -1.73% return since the beginning of the year, while its 12-month returns are up by 4.45%. The stock closed at $1,227.25 per share on March 03, 2022.
Here is what LRT Capital Management has to say about Texas Pacific Land Corporation in its Q4 2021 investor letter:
“Long time readers will know that we rarely invest in commodity businesses. However, there are periods in the market where commodity-based businesses outperform the broad indexes by a wide margin. Therefore, in order to have balance in the portfolio, we have long searched for a competitively advantaged company in the commodity space. We believe that Texas Pacific Land Trust (TPL), meets that criteria. Formed out of assets of formerly bankrupt railroads, TPL controls the largest acreage of land in the Permian basin – the center of the US shale oil industry. The company has two main sources of income: 1) royalties from oil & gas extracted on its properties – essentially a free call option on future oil prices and production; and 2) a water business which 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 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.”
Image: Texas Pacific Land Trust Office/Credit: Google Maps
Our calculations show that Texas Pacific Land Corporation (NYSE: TPL) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. TPL was in 24 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 24 funds in the previous quarter. Texas Pacific Land Corporation (NYSE: TPL) delivered a 0.64% return in the past 3 months.
In January 2022, we also shared another hedge fund’s views on TPL in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.
