Texas Pacific Land (NYSE:TPL) just hit the big leagues. The landowner-turned-energy player is joining the S&P 500 index on November 26, replacing Marathon Oil, which ConocoPhillips officially acquired this week. Investors aren’t waiting to celebrateTexas Pacific Land’s shares have already shot up nearly 12% Friday’s morning, building on an eye-popping over 200% surge this year. And here’s the kicker: S&P inclusion means funds and ETFs tracking the index will pile in, likely keeping its momentum alive in the short term. That’s the power of the S&P Phenomenon.
But Texas Pacific Land isn’t just another oil stock. This company, born from the ashes of a bankrupt railroad in 1888, owns a massive 873,000 acres in the Permian Basin, America’s top oil and gas hotspot. Over the years, it’s gone from a liquidation trust to a full-fledged corporation, making money not just from oil and gas royalties but also by leasing land to drillers, selling water to frackers, and handling wastewater disposal. Recently, it’s broadened its horizons even further, adding bitcoin miners and renewable energy players to its roster of tenants. With a business model like that, it’s no wonder Texas Pacific Land has outpaced even 2024’s superstar stock, Nvidia (NASDAQ:NVDA)
Warren Buffett (Trades, Portfolio)’s early investment history adds an intriguing layer to Texas Pacific Land’s story. As a teenager, Buffett made Texas Pacific Land Trust his second-ever stock purchase, drawn to its steady stock buybacksa rare and attractive strategy at the time. Reflecting on his investment at a 2022 Berkshire Hathaway meeting, Buffett praised the company’s disciplined approach, noting how they bought stock week, after week, after week. While Buffett’s early involvement was brief, Texas Pacific Land’s legacy as a disciplined and innovative operator continues to resonate with investors today.
This article first appeared on GuruFocus.
