Episode Details

Welcome to Episode 19 of the Preferred Shares Podcast.

We interviewed a special guest, Chadd Garcia, about Texas Pacific Land Corporation (TPL). Chadd is a veteran investment analyst, has worked in private equity, and is currently Vice President & Portfolio Manager at Ave Maria Mutual Funds.

In This Episode

Here are some highlights from the podcast episode about Texas Pacific Land Corporation (TPL):

* [1:52] – Chadd explains how he became interested in TPL.

* [2:53] – TPL’s early history

* [4:48] – Oil was discovered in West Texas in the 1920s, but fracking in the 2010s significantly increased the value of the land.

* [6:17] – TPL’s decision to get in the water business to support fracking.

* [11:12] – TPL’s unique shareholder base, comprised of long-term investors and Texas families.

* [14:11] – The reasons for internally handling the water business.

* [16:54] – The best way to assess TPL’s valuation, considering its unique advantages and potential call options.

* [18:07] – Discussion about the potential of data centers in the Permian Basin.

* [23:00] – Chadd shares his view that management would be better off allocating capital to share repurchases.

* [31:04] – Chadd is generally not a fan of TPL acquiring royalties.

* [36:14] – Discussion of how and why TPL recently became a corporation after being a trust for over 130 years.

* [38:09] – Chadd shares some concerns with management’s compensation structure.

* [40:22] – Appropriate incentive schemes for royalty companies.

Additional Reading & Listening

Curious to see what else we’ve been working on? Check out some of the interesting things we’ve done recently:

* Lawrence Hamtil (Fortune Financial and @lhamtil) was recently interviewed by Paul Cerro of Cedar Grove Capital. They discussed military history and the defense industry.

* 🎙️ IC #4: The Future of Defense — The History, Advances, And Outlook

* Douglas Ott (Andvari Associates and @yesandnotyes) wrote about the recent results of Mettler-Toledo and CoStar Group

* 📖 The Mighty Florance — CoStar Group FY2024 Results: Margins Up, Growth Continues

* 📖 Mettler-Toledo FY2024 Results — A Return to Positive Revenue Growth with Highest Gross Margins Ever

* Devin LaSarre (Invariant and @DevinLaSarre) was interviewed recently about Haypp Group and has written about the results of Philip Morris International

* 🎙️ Planet MicroCap — Cleaning Up Unclean Stories, Numbers, Narratives, Nicotine Industry + Haypp Group with Devin LaSarre, Founder & Editor of Invariant

* 📖 Philip Morris International: Conquest

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