Category Archives: Texas Pacific Land

Texas Pacific Land Corp. Price Momentum Indicator

Below is the Price Momentum Indicator for Texas Pacific Land Corp. (TPL) from 2008-2023: Continue reading

Texas Pacific Land: 1958-1974

Below is a follow-up to our February 15, 2019 posting on Texas Pacific Land (TPL) from 1941 to 1967.
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See also:

What If: Texas Pacific Land Trust

What if Texas Pacific Land Trust (TPL) were to retain a dividend policy that was in place from 1982 to 2016?

This means that we took the dividend in 1982 and 2016, determined the compounded annual growth rate and applied it to Edson Gould’s Altimeter until 2020.  The outcome provides an alternative view to our prior work on the downside risk to TPL and supports the claim by a commenter on SeekingAlpha.com that TPL could decline to approximately $25.

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1982 to 2013

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2009 to 2020

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How We Did it

  1. Obtained the dividend and price data from Yahoo!Finance.
  2. Deleted dividend payments that were inconsistent (i.e. extra/special payments).
  3. Calculated CAGR at MoneyChimp.com in the period from 1982 to 2016.
  4. Applied CAGR of TPL to Gould’s Altimeter.

see also:  All Prior reviews on TPL

Review: Texas Pacific Land 1941-1967

The numbers for Texas Pacific Land Trust (TPL) are generally staggering. However, looking at the 1941 to 1951 and 1958 to 1967 data below puts the current activity in TPL, from the 2015 low to the 2018 peak, into perspective.

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See also: Our 10-Year price targets (undervalue, fair value, and overvalued levels) of Canadian and American dividend paying stocks (found here).

Review: Texas Pacific Land

On November 25, 2018, we offered up the following downside target for Texas Pacific Land (TPL):

“The minimum downside target is in a range of $397.12 to $401.00.  Going back to the period of 2007 to 2009, if TPL were to decline in a similar magnitude, the downside target from the $871.99 peak would be $244.16.”

From the peak of $871.99, TPL has declined to the intraday low of $409.00, which is exactly at our ascending $397.12 downside target.

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The rebound has been exceptional but requires one last step in the process of confirming that the trend is actually up.  In order for the trend to be CONFIRMED as up, the price of TPL needs to retest the $409 level and hold.  Without holding at the $409 level, TPL would be expected to test the ascending $290.66 target, at minimum.

A review of the November 25, 2018 posting shows the 2003 to 2016 period when a retest of a a prior low was achieved.

Texas Pacific Land Trust Downside Targets

In the period from October 3, 2018 to November 23, 2018, the price of Texas Pacific Land Trust (TPL) has declined from a recent high of $871.99 to the current level of $551.99, a decline of –36.69%.  The question on everyone’s mind is, “how low will the price go?”

Using past as precedent, we looked at the Speed Resistance Lines [SRL] as outlined by Edson Gould in the period from 2003 to 2016.  First, we remind our readers that under the extraordinary period of panic, from June 29, 2007 to March 9, 2009, TPL saw a decline of -72%.

Using the 2009 low, we see the $25.65 level as the pivot and the $230.82 level as the parabolic peak.  Those points give us the following SRLs:

  • $102.59 (conservative target)
  • $89.77 (mid-range target)
  • $76.64 (extreme target)

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The entire decline was –53.87% and saw the price of TPL achieve the conservative downside target of $102.59 and with the passage of time the price almost accomplished the $89.77 mid-range target.

Fast forward to November 23, 2018 where we see the peak of TPL at $871.99.  If we allow for only the conservative downside target to be achieved then TPL will go as low as $397.12.  However, remember back in December 9, 2010 when we said, in an article titled “Real Estate: The Verdict is In,” “…we feel that real estate has a six to nine year stretch of rising prices or ‘trading’ in a range and decreased foreclosures.”

“…we feel that real estate has a six to nine year stretch of rising prices or ‘trading’ in a range and decreased foreclosures.”

Since our prescient article in 2010, in the face of shadow inventory claims that were supposed to keep prices down, we have seen a clear rising trend in the price of real estate and a significant decrease in foreclosures.  Now, with the passage of 8 years, we believe that TPL will push the limits of downside action and achieve the extreme downside target as seen in the chart below. Continue reading