I printed out the article, I was so interested. You don't see much negative press on St. Joe.But I'm afraid I don't buy the premise (despite or because of that dandy voodoo chart). 1) The whole reason to buy/hold JOE is the undervalued assets. All that timberland and "swamp" is carried on the books at purchase price -- not current market value. It would take more than an increase in hurricanes to push the FMV down that low. 2) The market for their "communities" is up-market. These are the folks who's income and spending is not that much affected by macro economics. (I saw this personally as an owner of two high-end condos on Marco Island, FL. Real estate in general when up and down over the many years we owned. Our condos went up.) 3) Whereas the article painted a very negative view of JOE and environmental concerns, I'd say a more unbiased view is that they've had a pretty good run preserving the natural values of the areas they develop and dealing with the public entities that grant permits and such.Anyone want to challenge? (I would WELCOME contrary views!)-- Dale in Woodville
Here is kinda the way I look at St.Joe. I welcome any views or if you think its dead wrong or things I am leaving out please let me know.St.Joe has a market cap of approximately $4.46Billion dollars.Which based upon today's closing price is about 74.8 million shares. I know I could have gotten a better number but its close enough.OK St.Joe owns approximately 800,000 acres of land in the upper pan handle of Florida.So the market looks at St.Joe as each acre is worth around $5,575 dollars. No lets assume 70% of that land is swamp and thus not useable. Thats about 560,000 acres and lets just value the swamp at $300 an acre. That gives us a value of $168,000,000 nothing huge. Now lets assume we can develop another 240,000 acres into whatever they want at $20,000 an acre. That comes out to be $4.8Billion in useable acres. For a total market cap of $4.968 Billion dollars or about $508 million under valued.$508 million helps but I'd still be underwater but at the same time I think over time $20,000 an acre is a little low. Plus I'd still be curious what a more detailed long term plan (10+ years) for growing this company.Any thoughts on this analysis or St.Joe period?
lets assume 70% of that land is swamp and thus not useableIs this a valid assumption? Joe is historically a paper company, so their land that we're basing this on was mostly pine trees. Was that swamp land? Or did they buy a lot of dry wooded land?
The 70% is totally A WAG. I have no idea, having lived in Tallahasse during my time in college, I can tell you from what I saw, most of the swamp is south of I-10 and there really isn't that much swamp in the area.Being a paper company I would think the 70% is totally low, I'm not sure what someone would pay for 400-500 acres of land for hunting, fishing, family investment, heck maybe even timber, etc. But I'd be willing to bet its more than a few hundred bucks an acre.Looks like we could do another analysis with these new ideas and send St.Joe well north of the current valuations.
I live in Tallahassee now, as of 12 days ago. If I knew which land they owned, I'd drive out and eye-ball it. How's that for first-hand research?
Nats43 sez:I live in Tallahassee now, as of 12 days ago. If I knew which land they owned, I'd drive out and eye-ball it. How's that for first-hand research?We were as close as I-10 in Gulfport (MS) and actually thought of doing some investigation. Unfortunately there was a small matter of a major highway bridge completely gone!Seems like we might mine some information from their Investor Relations? And deeds to land are public. I'd also be interested in how much they get for a lot/home in their developed areas and also how much they realize when they sell raw land (which they do from time to time.)One other point in their favor that no one has yet mentioned is that Third Avenue Funds is the biggest holder of JOE and they haven't been selling. In fact, should the price slump more, I'd not be surprised to see Whitman and company buying up more.-- Dale in Woodville
I'll add this to my list of projects. Unfortuately (for the timely completion of the project, but not for me), I'm about to set out on a tour of the Western states with my travel trailer and won't be back until sometime in June. Gotta find someone to mow my lawn. Won't be doin' much tradin' for the next few months. JOE will have to go on without me. Gotta get fully invested before I leave and cross my fingers. Hope for wi-fi at the campgrounds. Ah, the retired life.....StanRetired in Tallahassee
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