What’s the max?


We believe that many of the core positions in the Fund are actually both true growth and value investments. As an example, Texas Pacific Land Trust has grown sales and net income at a 50% compound annual rate over the trailing five years. A statistical review might conclude that this is a “reasonably priced” growth stock, trading at approximately 16.5x trailing earnings over the past twelve months. However, this earnings figure includes a sizeable one‐time land sale and is not directly relevant to the run‐rate cash flow of the business. That being said, a bottom‐up valuation of the company’s land portfolio and related oil and gas, easement and water businesses suggests a substantial discount to net asset value, given that less than 10% of the company’s core assets have been exploited to date.

Thanks to Gary for this link!

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