Sunday, December 18, 2005

Skiing Anyone? Part II of II
Blue Ridge Real Estate
Ticker: BLRGZ
Price: $38.50
Avg Volume: 200
Shares Out: 2.39 million
Market Cap: $93 million

The Fundamanentals
Total revenues for 2004 were $17.375 million, down from 2003s $18.2 million. Net income was $6.25 million in 2004, which included a gain from discontinued ops of $12.4 million before tax, versus 2003s net loss of $879 thousand. Ski operations generate more than half of company revenue, but has generated an operating loss for the company the past couple of years. Furthermore, ski revenue is on the decline, to $9.74 million in 2004 from $12.3 million in 1998.

Clearly, if there is significant value within Blue Ridge, its not for earnings, or sales growth. If anything, the potential value is in the company's assets. Many value players (ourselves included) sometimes get hung up on the potential value of an asset, ignoring the fact that if value is not being unlocked through current operations, it may never be. We don't know if thats the case with Blue Ridge. We are intrigued by the company's land holdings, and want to be impressed by the ski operations. We're just not sure what it's all worth. How's that for honesty?

Kimco Realty
Of interest to us is the fact that major real estate player Kimco Realty owns more than 1.3 million shares, or more than half of Blue Ridge.

An interesting combination of real assets, we're just not sure how to value it. We'd like to see the ski operations start generating a profit, and stop the revenue slide. Keep in mind, this issue is very thinly traded, and not liquid.

*The author does not have a position in this stock. This is neither a recommendation to buy or sell this security. All information provided believed to be reliable and presented for information purposes only.

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