Land Review 2007: Part II

There was quite a bit of interest in Part I of 2007's Land Review, so today, we give you Part II. For clarification, we are not suggesting that any or all of these companies are ripe for purchase. Value is in the eye of the beholder, and the companies I value are likely to be shorted by someone who has an opposing view. (See our8/7/07 column where Greenlight Capital's David Einhorn and I tangled over our repective opinions on St. Joes (JOE).

(Market Cap and EV are in $ millions)
Scheid Vineyards
Ticker: SVIN
Recent Price: $35.55
52 High/Low: $39/$32
Avg Volume: 50
Mkt Cap: 36
Ent Value: 70
Acres Owned: 1800
EV/Acre: $38,889
Location: California
Primary Use: Vineyards
Shares/Acre: 1094

Tejon Ranch
Ticker: TRC
Recent Price: $41.43
52 High/Low: $57.09/$35.8
Avg Volume: 50000
Mkt Cap: 700
Ent Value: 620
Acres Owned: 270000
EV/Acre: $2296
Location: California
Primary Use: Development/Ag
Shares/Acre: 55

St Joes
Ticker: JOE
Recent Price: $31.01
52 High/Low: $64.1/$26.7
Avg Volume: 863000
Mkt Cap: 2306
Ent Value: 2841
Acres Owned: 718240
EV/Acre: $3956
Location: Florida
Primary Use: Development/timber
Shares/Acre: 128

Texas Pacific Land
Ticker: TPL
Recent Price: $43.45
52 High/Low: $62.75/$32.01
Avg Volume: 17000
Mkt Cap: 457
Ent Value: 448
Acres Owned: 966392
EV/Acre: $464
Location: Texas
Primary Use: Leased for grazing/oil
Shares/Acre: 11

Cadiz
Ticker: CDZI
Recent Price: $19.13
52 High/Low: $27/$16.06
Avg Volume: 37000
Mkt Cap: 228
Ent Value: 245
Acres Owned: 45000
EV/Acre: $5444
Location: California
Primary Use: Water/ag
Shares/Acre: 285

Avatar
Ticker: AVTR
Recent Price: $38.06
52 High/Low: $86.52/$37.71
Avg Volume: 116000
Mkt Cap: 315
Ent Value: 259
Acres Owned: 32000
EV/Acre: $8094
Location: Florida, Arizona
Primary Use: Development
Shares/Acre: 213

Pope Resources
Ticker: POPEZ
Recent Price: $41.78
52 High/Low: $50.01/$34
Avg Volume: 6000
Mkt Cap: 196
Ent Value: 242
Acres Owned: 118000
EV/Acre: $2051
Location: Washington
Primary Use: Timber/Development
Shares/Acre: 49

Potlach Corp
Ticker: PCH
Recent Price: $45.76
51 High/Low: $49.98/$38.99
Avg Volume: 364000
Mkt Cap: 1793
Ent Value: 2191
Acres Owned: 1500000
EV/Acre: $1461
Location: Arizona, Idaho, Minnesota
Primary Use: Timber
Shares/Acre: 32


Mauna Loa
Ticker: NUT
Recent Price: $3.55
52 High/Low: $6.27/$3.5
Avg Volume: 17400
Mkt Cap: 27
Ent Value: 30
Acres Owned: 2242
EV/Acre: $13381
Location: Hawaii
Primary Use: Agriculture
Shares/Acre: 3769

Keenawaw Land
Ticker: KEWL
Recent Price: $217
52 High/Low: $222.25/$171
Avg Volume: 500
Mkt Cap: 139.1
Ent Value: 139.1 (est)
Acres Owned: 150000 (est)
EV/Acre: $927 (est)
Location: Michigan
Primary Use: Timber
Shares/Acre: 4

This is not intended to be an exhaustive list of all companies that hold substantial amounts of land. There are many, and perhaps we'll profile others in future postings. Happy New Year!



*The author holds positions in JOE and TRC. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only. The author will not trade any of the securities mentioned (buy, sell, short) for at least two weeks following the date of this post.

Land Review 2007: Part I

What better way to say goodbye to 2007, we thought, than to review some of the companies holding one of our favorite assets, land. It’s generally been a pretty rough year for most firms that have anything to do with real estate. Some have no doubt been punished well beyond justification, but then again, Mr. Market is in control, and does as he sees fit. We believe this has created some compelling opportunities even if the housing situation worsens.

For the purposes of this piece, we’ve identified 20 or so companies with various operating businesses, that have substantial land holdings. Some of these have land that is a peripheral part of operations, or just one of several operating businesses. These companies have typically been less affected by recent market events; especially if their other operations are firing on all cylinders. Others have suffered from a double whammy: huge declines due to the geographical location of their land, and the fact that land is their primary business.

Two data calculations we use are worthy of explanation:

EV/Acres: Enterprise Value of the company/Total owned acres
Enterprise value is the market value of the firm plus debt, minus cash, and is an approximation of all claims that equity and debt holders have on a firm. We believe EV is a better estimate of true current market value, because it represents all claims investors hold in the capital structure, not just equity.

We use this calculation not to attempt to value the land on a per acre basis, but rather for perspective. The results of this calculation will be all over the board depending on the amount of land a company holds, how prominent it is in a company’s operations, as well as the land’s quality. (Obviously, timber land and marsh land is less valuable than vacation property)

Shares Per Acre
This represents the number of shares you would need to own in order to own one acre of a particular company’s land. This measure has no particular use, other than it is interesting to your Cheap Stocks editor, and helps measure an equity stake where the underlying company owns land in different terms. (For example, instead of saying you just picked up 550 shares of Tejon Ranch, you could say you just bought 10 acres of California land).

Below is Part I, the first ten companies.

(Market Cap and EV are in $ millions)
Alexander and Baldwin
Ticker: ALEX
Recent Price: $52.95
52 High/Low: 59.42/43.62
Avg Volume: 200000
Mkt Cap: 2227(million)
Ent Value: 2674(million)
Acres Owned: 89440
EV/Acre: $29,897
Location: Hawaii
Primary Use: Agriculture/development
Shares/Acre: 574

Alico
Ticker: ALCO
Recent Price: $36.87
52 High/Low: 65/35.88
Avg Volume: 21000
Mkt Cap: 271
Ent Value: 327
Acres Owned: 135466
EV/Acre: $2414
Location: Florida
Primary Use: Agriculture/Cattle
Shares/Acre: 574

Biloxi Marsh Lands
Ticker: BLMC
Recent Price: $31.00
52 High/Low: 39/28.25
Avg Volume: 200
Mkt Cap: 76
Ent Value: 70
Acres Owned: 90000
EV/Acre: $778
Location: Louisiana
Primary Use: Oil and Gas
Shares/Acre: 25

Blue Ridge Real Estate
Ticker: BLRGZ
Recent Price: $31
52 High/Low: 39/28.25
Avg Volume: 72
Mkt Cap: 76
Ent Value: 93
Acres Owned: 17009
EV/Acre: $5468
Location: Pennsylvania
Primary Use: Ski resorts, commercial, development
Shares/Acre: 176

Consolidated Tomoka Land
Ticker: CTO
Recent Price: $62.74
52 High/Low: 80.5/60.5
Avg Volume: 11400
Mkt Cap: 359
Ent Value: 363
Acres Owned: 11500
EV/Acre: $31,565
Location: Florida
Primary Use: Commercial, golf, development
Shares/Acre: 503

JG Boswell
Ticker: BWEL
Recent Price: $1025
52 High/Low: 1075/686
Avg Volume:
Mkt Cap: 960(est)
Ent Value: 1030(est)
Acres Owned: 172000
EV/Acre: $5,988
Location: California
Primary Use: Agriculture/development
Shares/Acre: 6

Maui Land and Pineapple
Ticker: MLP
Recent Price: $26.62
52 High/Low: 38.99/25.7
Avg Volume: 12200
Mkt Cap: 217
Ent Value: 248
Acres Owned: 25400
EV/Acre: $9,764
Location: Hawaii
Primary Use: Development/Agriculture
Shares/Acre: 367

PICO Holdings
Ticker: PICO
Recent Price: $34.16
52 High/Low: 49/33.01
Avg Volume: 164000
Mkt Cap: 543
Ent Value: 590
Acres Owned: 560000
EV/Acre: $1,054
Location: Nevada
Primary Use: Water/development
Shares/Acre: 31

Plum Creek Timber
Ticker: PCL
Recent Price: $45.16
52 High/Low: 48.45/37.13
Avg Volume: 1359000
Mkt Cap: 7780
Ent Value: 10092
Acres Owned: 8200000
EV/Acre: $1,231
Location: 18 states
Primary Use: Timber, some development
Shares/Acre: 27

Rayonier
Ticker: RYN
Recent Price: $45.59
52 High/Low: 49.55/38.17
Avg Volume: 545000
Mkt Cap: 3555
Ent Value: 4084
Acres Owned: 1931323
EV/Acre: $2,115
Location: several states
Primary Use: Timber, some development
Shares/Acre: 46

We’ll publish the balance of the list in our next posting.

We would like to thank all of our readers for a fantastic 2007. Our readership has grown by leaps and bounds over the year, and we just hit the 500 mark in subscribers. In any event, we look forward to delivering compelling, off the beaten path investment ideas in 2008.

*The author holds positions in BLMC, BWEL, MLP, PICO and PCL. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only. The author will not trade any of the securities mentioned (buy, sell, short) for at least two weeks following the date of this post.

Potential Bargains in Profitable, Cash-Rich Double Net/Nets Part II

As a follow up to last weeks piece, here are an additional handful of companies trading at less than 2 times net current asset value that also meet the following criteria:

*Market Cap Minimum $100 million
*Price/Earnings Ratio less than 20
*Net Cash (cash less LT debt) is at least 20 percent of market cap


Silicon Image Inc
Ticker: SIMG
Price: $5.05
Mkt Cap: $425
NCAV: $222 million
Cash & ST Inv: $226 million
PE: 11

MKS Instruments
Ticker: MKSI
Price: $18.41
Mkt Cap: $1.04 billion
NCAV: $536 million
Cash & ST Inv: $360 million
PE: 11

United Capital Corp
Ticker: AFP
Price: $25.3
Mkt Cap: $210 million
NCAV: $116 million
Cash & ST Inv: $151 million
PE: 6

Heelys Inc
Ticker: HLYS
Price: $6.45
Mkt Cap: $175 million
NCAV: $121 million
Cash & ST Inv: $151 million
PE: 6

Nice to see some non-tech companies here; nothing against tech, but the truth is, your editor just isn't adept at tech (perhaps just not smart enough). As always, buyer beware. More often than not, companies are often cheap for very good reasons. What we've published here should be seen as the starting point, not a definitive list of must-have names.

*The author does not have positions in any of the companies mentioned. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only. The author will not trade any of the securities mentioned (buy, sell, short) for at least two weeks following the date of this post.

Potential Bargains in Profitable, Cash-Rich Double Net/Nets

Occasionally, we take liberties with Ben Graham’s original formula used to identify companies trading below their net current asset value, and loosen the criteria a bit. (Truth be told, Ben would not have bought a company unless it traded for less than 2/3 NCAV, and even then, he would have had to be convinced the company had legs.) This week we’ll identify some of the companies trading at less than twice their NCAV, with the following attributes:

*Market Cap Minimum $100 million
*Price/Earnings Ratio less than 20
*Net Cash (cash less LT debt) is at least 20 percent of market cap

The objective is to identify companies that are not just potentially cheap, but also have levels of cash adequate to weather storms that may be on the horizon. As always, this is a working list that requires additional research and scrutiny prior to making investment decisions. Not surprisingly, many on the list are tech companies. Perhaps we’ll dig deeper into a couple of the more compelling names in the coming weeks.

ZYGO Corp
Ticker: ZIGO
Price: $11.29
Mkt Cap: $20
NCAV: $102 million
Cash & ST Inv: $41 million
PE: 19

Rudolph Technologies
Ticker: RTEC
Price: $11.95
Mkt Cap: $349 million
NCAV: $211 million
Cash & ST Inv: $121 million
PE: 17

Integrated Silicon Solution Inc
Ticker: ISSI
Price: $6.52
Mkt Cap: $246 million
NCAV: $161 million
Cash & ST Inv: $134 million
PE: 16

Eagle Test Systems
Ticker: EGLT
Price: $10.95
Mkt Cap: $251 million
NCAV: $141 million
Cash & ST Inv: $112.5 million
PE: 14

Cutera Inc.
Ticker: CUTR
Price: $15.14
Mkt Cap: $192 million
NCAV: $99 milliom
Cash & ST Inv: $100 million
PE: 13

Benchmark Electronics
Ticker: BHE
Price: $17.95
Mkt Cap: $1.28 billion
NCAV: $852 million
Cash & ST Inv: $379 million
PE: 13

Conn's Inc
Ticker: CONN
Price: $18.1
Mkt Cap: $420 million
NCAV: $244 million
Cash & ST Inv: $210 million
PE: 11

*The author does not have positions in any of the companies mentioned. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only. The author will not trade any of the securities mentioned (buy, sell, short) for at least two weeks following the date of this post.