Texas Pacific Land Trust
(NYSE:TPL) shares opened even today after Mercury Real Estate Advisors
disclosed an 8.1% stake in the company along with a letter to the board
of directors in a
Schedule 13D/A
filing with the SEC. The Connecticut-based hedge fund asked that the
company increase its buyback program and split its sub-shares on a
further 10 for 1 basis in order to further unlock value for
shareholders.
Mercury expressed their disappointment that the
company only repurchased 3,800 shares in the first quarter of 2007 - a
number that pales in comparison to the company's 9,000 share quarterly
average between 2005 and 2006. This fact is especially disturbing given
the fact that the company has $8 million in cash, $2 million in
quarterly profits, and notes receivable of over $20 million. Spending
only $6 million of this cash would result in over 28,000 shares
repurchased!
Mercury also expressed their concern over the TPL's
high share price. The stock is currently trading at $209 and has
reached a high of $249 earlier this year. The hedge fund believes that
the company should split the stock on a 10 for 1 basis to bring the
shares to a more affordable $22 to $25 range. This would result in
greater liquidity, which would be beneficial for all shareholders.
Overall,
Mercury is confident in the company's overall business plan and
valuable assets but believes that the stock price could be supported
through these two measures. If the company institutes these changes, it
could significantly enhance value. This makes TPL a stock
worth watching!
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