TXO Partners Director Bob Simpson Buys $870,430 of Stock

Director Bob Simpson spent $870,429.67 on TXO Partners LP (NYSE:TXO) stock on Friday, November 6, buying 67,111 shares at an average of $12.97 each. That's a 0.71% increase in his ownership, and it came three days after the oil-and-gas producer missed quarterly estimates by a wide margin.

The filing, disclosed to the Securities and Exchange Commission, shows Simpson now holds 9,567,111 shares worth roughly $124,085,429.67. Insider buying (purchases of company stock by directors or executives) often draws attention as a signal of insider conviction — though a 0.71% bump on a nine-figure position is modest by any measure.

How bad was the earnings miss?

It was large. On Tuesday, November 3, TXO reported a loss of $0.58 per share for the quarter, missing the analyst consensus of $0.21 by $0.79. Revenue came in at $55.09 million against expectations of $102.05 million — a shortfall of nearly half.

The profitability picture was equally rough:

• Negative return on equity (a measure of profit generated on shareholder capital) of 11.63%
• Negative net margin of 20.52%
• Analysts still expect $0.65 EPS for the current fiscal year

In short, the quarter was a miss on both lines, and the forward estimate implies an expected swing back to profit.

What happened with the dividend?

TXO raised its quarterly dividend to $0.44 from $0.40, payable Friday, November 20 to stockholders of record on Friday, November 13. That's $1.76 annualized — a 12.6% yield at recent prices, a striking figure for a company with negative earnings. The ex-dividend date (the date after which new buyers don't receive the payout) is November 13.

The catch: the dividend payout ratio (the share of earnings paid out as dividends) sits at -111.89%, meaning the distribution currently exceeds net income by a wide margin.

Where does the stock trade?

Shares opened at $13.94 on Thursday. That sits between the 50-day moving average of $14.24 and the 200-day average of $13.21. The twelve-month range runs from a low of $10.12 to a high of $15.58.

On the balance sheet, TXO carries a debt-to-equity ratio of 0.45, with a current ratio of 0.63 and a quick ratio of 0.63 — both liquidity measures below 1.0, meaning short-term assets don't cover short-term liabilities.

What are institutions doing?

Hedge funds have been building positions across recent quarters:

• Sanders Morris Harris LLC opened a new position in Q3 worth about $4,305,000
• Pin Oak Investment Advisors Inc. bought a new stake in Q2 worth about $4,469,000
• Hennessy Advisors Inc. took a new Q2 stake of about $488,000
• Energy Income Partners LLC grew its holding 27.5% in Q1, adding 312,120 shares to reach 1,449,028 shares worth $18,229,000
• Bank of America Corp DE boosted its position 259.3% in Q1, adding 270,465 shares to hold 374,780 shares worth $4,715,000

Institutional investors own 27.44% of the company's stock.

What do analysts say?

The ratings flow has cut both ways. Stifel Nicolaus initiated coverage on Thursday, September 10 with a $17.00 price objective. Stephens assumed coverage on Wednesday, October 7 with a $22.00 objective. Zacks Research upgraded the stock from hold to strong-buy on Thursday, September 3.

On the other side, Weiss Ratings cut its rating from sell (d+) to sell (d) on Tuesday, and Wall Street Zen downgraded from strong-buy to hold on Saturday, November 7.

The tally: two Strong Buy ratings, two Buy ratings, one Sell. MarketBeat.com data puts the consensus at Buy with a $19.00 target price.

TXO Partners, formed in 2022 and public since 2023, acquires and develops conventional oil, natural gas and natural gas liquids reserves across the Permian, San Juan and Williston basins.

An insider writing an $870,000 check into that mix of a big miss, a double-digit-yield dividend and split analyst views is the number worth watching.