LandBridge: I'd Love To Buy, But I Don't Like The Valuation

Summary LandBridge Company LLC's water royalty volumes are rising despite slower well drilling. This is due to increasing wastewater volumes from maturing Delaware Basin wells. A projected Delaware Basin disposal-capacity shortfall over the next 10 years should support higher royalty rates. LandBridge is pursuing data-center leases for up to 10 GW, creating meaningful long-term optionality that I estimate can lead to a 6% uplift on TTM revenues. LandBridge trades above its historical and peer 1-yr forward EV/EBITDA benchmarks, despite operating momentum and potential digital-infrastructure upside. LB stock has some bullish momentum but seems too risky to buy as it is at a monthly resistance level. PeopleImages/iStock via Getty Images Business brief LandBridge Company LLC ( LB ) monetizes oilfield activity in owned parts of the Delaware sub-basin within the larger Permian Basin , which is the US' largest source of O&G production. LandBridge mainly makes money from This article was written by Hunting Alphas 9.16K Followers Follow Hunting Alphas manages a long-only, zero-leverage global equity portfolio through a Self Managed Super Fund. The main portfolio managed is defensive in nature and on a risk-adjusted basis, it has outperformed the market, generating 7.5% annualized alpha, Sortino ratio of 2.0, Information Ratio of 0.67, and low max drawdowns.Hunting Alphas' articles are 5-Minute Stock Pitches that focus on the core stock drivers based on fundamentals, sentiment, valuations, and technical analysis across all types of sectors.Portfolio performance is shared monthly, portfolio holdings disclosed weekly and all the Excel models for the 5-Minute Pitches are shared on the Hunting Alphas website. Note: Hunting Alphas is related to VishValue Research on Seeking Alpha. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.