Texas Pacific Land Corporation (NYSE:TPL) is a favorite amongst institutional investors who own 61%

Texas Pacific Land Trust +0.47%

Texas Pacific Land Trust

TPL

611.26

+0.47%

Key Insights

  • Given the large stake in the stock by institutions, Texas Pacific Land's stock price might be vulnerable to their trading decisions
  • The top 25 shareholders own 48% of the company
  • Recent purchases by insiders

To get a sense of who is truly in control of Texas Pacific Land Corporation (NYSE:TPL), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 61% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.

Let's delve deeper into each type of owner of Texas Pacific Land, beginning with the chart below.

View our latest analysis for Texas Pacific Land

ownership-breakdown
NYSE:TPL Ownership Breakdown January 30th 2024

What Does The Institutional Ownership Tell Us About Texas Pacific Land?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Texas Pacific Land already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Texas Pacific Land, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
NYSE:TPL Earnings and Revenue Growth January 30th 2024

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Texas Pacific Land is not owned by hedge funds. Horizon Kinetics LLC is currently the company's largest shareholder with 18% of shares outstanding. The Vanguard Group, Inc. is the second largest shareholder owning 8.2% of common stock, and BlackRock, Inc. holds about 5.8% of the company stock.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Texas Pacific Land

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that Texas Pacific Land Corporation insiders own under 1% of the company. As it is a large company, we'd only expect insiders to own a small percentage of it. But it's worth noting that they own US$15m worth of shares. In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 39% stake in Texas Pacific Land. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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