Impressive top line growth. I can’t help but see that EBITDA (newly included by TPL in releases) is pretty much equal to revenues from royalties, land sales, and easements. It appears as if all profits from water are being eaten by legal fees and comp. Estimated water margins appear to have stabilized near 50%. The sheet below isn’t perfect but it’s likely directionally right. Margins are being squeezed by expenses.
Simple margins tell you this as well.
Can’t wait until legal fees are in the rear view mirror.
I’m not operating the business but my guess is that there are some aspects that can be tightened up. We shall see.
That all being said, $7.74/share x 4 = $31/share annualized. $569 / $31 = 18 P/E. Low to historic multiples. We’re looking at a $775 price at a 25x multiple which is more consistent with historical valuations.
The Committee has continued to meet with its advisors, including Credit Suisse, which is assisting the Trust and the Committee in developing its recommendation to the Trustees. The Committee has met 5 times, both in person and over the phone, since its inception, and deliberations to date have been productive and informative. Although its deliberations are confidential, the Committee will continue to provide monthly progress reports to shareholders as required by its Charter before issuing a final recommendation to the Trustees.
Was hoping for a bit more progress than that! So 2 meetings in October?