Inside a $300 Million Bet on a Land-Based Energy Stock That's Fallen 10% This Past Year
Key Points
New York City-based Horizon Kinetics Asset Management increased its LandBridge holding by 133,188 shares in the third quarter.
Despite the increased stake, the net position value decreased by $71.14 million as shares collapsed during the period.
As of September 30, Horizon Kinetics reported holding 5.63 million LB shares valued at $300.47 million.
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New York City-based Horizon Kinetics Asset Management reported a buy of 133,188 shares of LandBridge Company LLC (LB), while the position value decreased by $71.14 million, per a November 14 SEC filing.
What Happened
According to a filing with the Securities and Exchange Commission dated November 14, Horizon Kinetics Asset Management increased its position in LandBridge Company LLC (LB) by 133,188 shares in the third quarter. The post-transaction position totaled 5.63 million shares with a reported value of $300.47 million at quarter-end.
What Else to Know
LandBridge comprised 3.66% of Horizon Kinetics’ 13F assets after the transaction.
Top holdings following the filing:
- NYSE:TPL: $3.27 billion (40.2% of AUM)
- NYSEMKT:GBTC: $1.27 billion (15.6% of AUM)
- NYSE:WPM: $312.27 million (3.8% of AUM)
- NYSE:LB: $300.47 million (3.7% of AUM)
- NYSE:FNV: $225.67 million (2.8% of AUM)
As of Tuesday, LB shares were priced at $52.57, down 10% over the past year and well underperforming the S&P 500, which is up about 15% in the same period.
Company Overview
| Metric | Value |
|---|---|
| Market Capitalization | $4.18 billion |
| Revenue (TTM) | $178.81 million |
| Net Income (TTM) | $24.53 million |
| Price (as of Tuesday) | $52.57 |
Company Snapshot
- LandBridge Company owns and manages land and resources, including surface acres and oil and gas royalty interests, with additional revenue from the sale of brackish water and surface composite materials.
- The company generates income through leasing land for oil and natural gas development, collecting royalties, and selling ancillary materials to energy sector participants.
- It serves oil and gas exploration and production companies operating primarily in the Delaware Basin region of Texas and New Mexico.
LandBridge Company LLC is a Houston-based energy infrastructure firm focused on maximizing value from land and resource assets in the Delaware Basin. Its strategy leverages a diversified portfolio of surface rights and royalty interests to support upstream oil and gas operations.
Foolish Take
Horizon Kinetics tends to concentrate capital in asset-heavy companies with durable economics, and LandBridge fits that pattern even as sentiment has soured. The stock is down about 10% over the past year, but the underlying business is moving in the opposite direction.
In the third quarter, LandBridge Company LLC posted revenue of $50.8 million, up 78% year over year, with adjusted EBITDA climbing to $44.9 million on an eye-catching 88% margin. Free cash flow reached $33.7 million, and management reaffirmed full-year adjusted EBITDA guidance of $165 million to $175 million. Those numbers matter more than the stock chart.
Last month’s $500 million senior notes offering and secondary share sale added noise, but they also funded acreage expansion and reduced near-term balance sheet pressure. Horizon Kinetics already runs a portfolio dominated by concentrated, long-duration assets like Texas Pacific Land and Franco-Nevada, so a 3.7% position here reads as consistency, not speculation.
Glossary
13F reportable assets: Securities that institutional investment managers must disclose quarterly to the SEC on Form 13F.
Assets under management (AUM): The total market value of investments managed on behalf of clients by a fund or firm.
Dividend yield: Annual dividends per share divided by the share price, expressed as a percentage.
Royalty interests: The right to receive a portion of revenue from resource production, such as oil or gas, without owning the resource.
Upstream operations: Activities related to the exploration and production of oil and natural gas.
Delaware Basin: A major oil- and gas-producing region in West Texas and southeastern New Mexico.
Trailing twelve months (TTM): The 12-month period ending with the most recent quarterly report.
Surface rights: Legal rights to use and control the surface area of a parcel of land, excluding mineral rights.
Brackish water: Water with higher salinity than freshwater but lower than seawater, often used in industrial processes.
Ancillary materials: Additional products or resources, such as water or construction materials, sold alongside a company's primary offerings.
Quarter end: The last day of a financial quarter, used as a reference point for reporting financial data.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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