LRT Capital Management, an investment management firm, published its first-quarter 2022 investor letter – a copy of which can be downloaded here. A return of -7.37% was recorded by the LRT Economic Moat strategy for the first quarter of 2022, resulting in a 12-month return of +16.72%. In the LRT Economic Moat strategy, as of April 1st, 2022, the fund’s net exposure was approximately 99% and its estimated net beta-adjusted exposure was 62.2%. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, LRT Capital Management mentioned Texas Pacific Land Corporation (NYSE:TPL) and explained its insights for the company. Founded in 1888, Texas Pacific Land Corporation (NYSE:TPL) is a Dallas, Texas-based publicly traded real estate operating company with a $10.5 billion market capitalization. Texas Pacific Land Corporation (NYSE:TPL) delivered a 9.43% return since the beginning of the year, while its 12-month returns are down by -15.05%. The stock closed at $1,366.60 per share on April 29, 2022.
Here is what LRT Capital Management has to say about Texas Pacific Land Corporation (NYSE:TPL) in its Q1 2022 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, 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 (NYSE:TPL), meets that criterion. 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. The company uses most of its cash flows to pay dividends and repurchase shares.”
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Our calculations show that Texas Pacific Land Corporation (NYSE:TPL) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Texas Pacific Land Corporation (NYSE:TPL) was in 24 hedge fund portfolios at the end of the fourth quarter of 2021. Texas Pacific Land Corporation (NYSE:TPL) delivered a 27.13% return in the past 3 months.
In April 2022, we also shared another hedge fund’s views on Texas Pacific Land Corporation (NYSE:TPL) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.
