Trailing P/E Check

23.9x as of 12/17/18.  Certainly at the low end of the range.

trailing pe 12-17-18

Update:  $TPL scraped off of $500 mid day today (12/18).  $500 implies a PE of 22.9x.  So down a turn day over day.

LTM earnings this time next year are likely somewhere between $25 and $30.  $25 x 22.9x = $572.5 or up 15% from here.

For reference, 20x current LTM earnings = $436.  Looks to be a reasonable floor which is funny as it just about half the peak price we saw earlier this year.  Two for one!

Source:  Bloomberg

5 thoughts on “Trailing P/E Check

  1. definitely low and low against the future. Lots of uncertainty with the markets and oil WTI dropping below 50 today didn’t help. I think your post on what Murray Stahl (thanks for transcribing key elements) finds valuable about TPL, excellent to keep in mind when there’s blood in the streets. One thing that is great, management can buy a lot more shares at these prices to retire! That’s what will compound the future of this tontine.

    Liked by 1 person

    • I’ve also heard from Horizon Kinetics commentary in past that TPL is somehow restricted from buybacks when average volume is <20,000. The average daily volume has now spiked over that threshold, so I wonder if that will really unlock the shackles the trustees have had in their buyback strategy. We've seen recently that at least two insiders (Glover and Packer) have purchased shares in the high $500s with their own money, so surely the trustees must recognize how undervalued this down turn is making the price.
      I'm shying away from daily watching the continued down drift through the end of the year with all the (exaggerated) concerns about oil price, but am greatly looking forward to an exciting turnaround in 2019.

      Liked by 1 person

    • It was in the 11/30 Investor Insight article that you blogged about on 12/10. You uncover some great stuff that I would never have the time to seek out on my own. Here’s the excerpt from the interview with Murray Stahl:
      “With respect to capital allocation, an increasingly important question for TPL is how it will deploy its increasing earnings. The trust has been repurchasing and cancelling shares for 120 years, but there’s
      a limit to the number of open-market purchases that can be made when average daily trading volume is less than 20,000 shares. With capital-expenditure requirements limited, it’s not a stretch to conclude
      we’re going to see a big increase in dividend payments.”

      Like

Comments are closed.