Natural Resource Partners L.P. (NRP): A Bull Case Theory

We came across a bullish thesis on Natural Resource Partners L.P. on Special Situation Investing’s Substack by Six Bravo. In this article, we will summarize the bull’s thesis on NRP. Natural Resource Partners L.P.'s share was trading at $95.19  as of June 20^th. NRP’s trailing was 9.07 according to Yahoo Finance.

Natural Resource Partners (NRP) stands out as a compelling investment not because of coal’s prospects, but due to its strategic positioning and forward-looking transformation. While coal currently constitutes the majority of NRP’s revenue, it is not a pure-play coal company. NRP is a royalty business with diversified interests across coal (both metallurgical and thermal), soda ash, and emerging carbon sequestration initiatives.

With metallurgical coal accounting for half its mineral rights revenue—more valuable and more resilient than thermal coal—NRP’s exposure is better insulated from the rapid decline expected in thermal coal use. Even if the most aggressive decarbonization scenarios materialize, met coal demand is expected to taper more slowly due to the absence of viable large-scale alternatives in steel production. Importantly, NRP’s near-term outlook is dominated not by commodity volumes but by its capital structure.

Having reduced its debt from $1.5 billion to just $156 million by 2023, the company will soon pivot from deleveraging to potentially rewarding shareholders through increased dividends or buybacks. This shift could significantly unlock value. Additionally, NRP’s large, contiguous landholdings position it uniquely to profit from carbon capture, utilization, and storage (CCUS), a crucial technology in net-zero pathways.

Given its geology and land rights, NRP is structurally advantaged in this emerging sector. While coal’s long-term future remains uncertain and politically fraught, NRP’s diversified model and transition strategy mitigate downside risks. In sum, NRP offers a special situation investment opportunity—its debt nearing resolution, its core assets still cash-generative, and its pivot toward CCUS offering long-term upside, irrespective of coal’s trajectory.

Previously, we covered a bullish thesis on Natural Resource Partners L.P. (NRP) by InvestSpecial in April 2025, which highlighted the company’s disciplined deleveraging, resilient royalty model, and potential for a dividend-driven re-rating. The company’s stock price has depreciated approximately 5% since our coverage. This is because coal and soda ash pricing remained soft, delaying near-term catalysts. The thesis still stands as NRP’s balance sheet is nearly clean, and its royalty streams remain stable. Six Bravo shares a similar view but emphasizes NRP’s diversification beyond coal and its strategic positioning in carbon sequestration.

Natural Resource Partners L.P. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 8 hedge fund portfolios held NRP at the end of the first quarter, which was 7 in the previous quarter. While we acknowledge the risk and potential of NRP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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