St Joe stock appears to rebounding, why?

Great points. Thanks for clarifying.

So that I understand, Watersound West is a 62 acre development with 199 units planned. If the 62 acres were sold at 100,000 JOE would have generated a sale price of 6.2mm. Allocating that cost out to the 199 units you have a homesite in Watersound West at a cost basis to the developer of $31K? The developer would want to mark that land up to cover his risk and carrying costs. So maybe 100% markup? This results in prices at Watersound West of less than 75K and a quick look on the website shows homesites listed around 300K on average.

I'm thinking the cost basis assumption was way too low.

Even factor in an additional 50% reduction in land prices and you're still at a higher level.

Unless I missed something, I think there is some good value in JOE if you have the right time horizon - which is long!

SHELLY, I thought shorting was now illegal?

St. Joe was at $35 a month ago. It is at $39 right now. If it was being negatively impacted I would have expected it to be lower.


Source: Google Finance

Joe is a small fish getting buffeted by the huge ocean swells of the most volatile stock market conditions since the Great Wall Street Crash.

If a financial bailout for the banks is agreed today it will go up big again. If not (or a near resolution looks unlikely) it will go down big.

Nothing to do with Disney or anything else stock specific.

Great points. Thanks for clarifying.

So that I understand, Watersound West is a 62 acre development with 199 units planned. If the 62 acres were sold at 100,000 JOE would have generated a sale price of 6.2mm. Allocating that cost out to the 199 units you have a homesite in Watersound West at a cost basis to the developer of $31K? The developer would want to mark that land up to cover his risk and carrying costs. So maybe 100% markup? This results in prices at Watersound West of less than 75K and a quick look on the website shows homesites listed around 300K on average.

I'm thinking the cost basis assumption was way too low.

Even factor in an additional 50% reduction in land prices and you're still at a higher level.

Unless I missed something, I think there is some good value in JOE if you have the right time horizon - which is long!

Using the article attached by Shelly the value of all the real estate holdings is about 2 billion. The value of all the stock today is about 4 billion. It sounds like JOE would have to get double the rate per acre rationalized in the article just to be worth the value of todays stock price.

Great points. Thanks for clarifying.

So that I understand, Watersound West is a 62 acre development with 199 units planned. If the 62 acres were sold at 100,000 JOE would have generated a sale price of 6.2mm. Allocating that cost out to the 199 units you have a homesite in Watersound West at a cost basis to the developer of $31K? The developer would want to mark that land up to cover his risk and carrying costs. So maybe 100% markup? This results in prices at Watersound West of less than 75K and a quick look on the website shows homesites listed around 300K on average.

I'm thinking the cost basis assumption was way too low.

Even factor in an additional 50% reduction in land prices and you're still at a higher level.

Unless I missed something, I think there is some good value in JOE if you have the right time horizon - which is long!

IMO, Watersound West Beach contains JOE's most valuable entitled property. Most everything else in their holdings portfolio is worth 1/30th per acre on average.

IMO, Watersound West Beach contains JOE's most valuable entitled property. Most everything else in their holdings portfolio is worth 1/30th per acre on average.

Why would WWB be more valuable than Watersound Beach or WaterColor? Granted WC is lower elevation, but it is also next to Seaside, which I think increases its value. WB appears to be identical topographically to WWB. But WB has much more beachfront, a beachclub, and dune lake buffers on both sides. Doesn't WWB have other developments right next door and much less beach/view. Am I mistaken? I've never actually seen WWB. Thanks.

SHELLY, I thought shorting was now illegal?

Excellent question! Are shorters like flippers?

Excellent question! Are shorters like flippers?

Kinda. In that they are speculators. Otherwise not really.

They borrow a stock and sell it. Then they buy it back and return it to its owner.

If the stock has gone down in the interim they make profit from the difference in price bought and sold. If it has gone up vice versa.

Why would WWB be more valuable than Watersound Beach or WaterColor? Granted WC is lower elevation, but it is also next to Seaside, which I think increases its value. WB appears to be identical topographically to WWB. But WB has much more beachfront, a beachclub, and dune lake buffers on both sides. Doesn't WWB have other developments right next door and much less beach/view. Am I mistaken? I've never actually seen WWB. Thanks.

IMO, JOE doesn't show much in their portfolio for Watersound Beach or Watercolor. Most of their holdings in those neighborhoods have been sold. West Beach is South of 30A and is probably only 12% to 15% sold out.

Great points. Thanks for clarifying.

So that I understand, Watersound West is a 62 acre development with 199 units planned. If the 62 acres were sold at 100,000 JOE would have generated a sale price of 6.2mm. Allocating that cost out to the 199 units you have a homesite in Watersound West at a cost basis to the developer of $31K? The developer would want to mark that land up to cover his risk and carrying costs. So maybe 100% markup? This results in prices at Watersound West of less than 75K and a quick look on the website shows homesites listed around 300K on average.

I'm thinking the cost basis assumption was way too low.

Even factor in an additional 50% reduction in land prices and you're still at a higher level.

Unless I missed something, I think there is some good value in JOE if you have the right time horizon - which is long!

You continue to miss the big picture.

You are still focusing on 62 acres out of the 10's of thousands of entitled land. Even if the WSWB land is worth more than $100k per acre, the other 10's of thousands of acres are worth a small fraction of the WSWB property. The WSWB property at $200k an acre (way too high when considering green space, roads, etc) is only worth $12.4 million to Joe (assuming none of it was sold already). This amount is totally immaterial to the overall valuation of Joe. The total remaining holdings in WSWB, WSB and WC are a dot on the Joe landscape. It's the other giant tracts of land in Deland, Tallahassee, Jacksonville, etc that make the difference in valuation and it is a huge, huge stretch to think this land is worth $100k per acre on average.

I think I will go buy some Ford and GM and be done with it all.

You continue to miss the big picture.

It happens to the best of us.

I have no personal interest in pumping the stock I just think it's a great time to buy the stock. I do think that JOE stock is the best indicator out there for anyone who actually owns land in SoWal of what the value of your asset is (I'm still dreaming of the day when I can say I own a piece of paradise)

As for JOE's stock price, I don't know of a single place in the US that has as good a barometer of the value of land than JOE is for Nwest Florida. It's holdings are a great cross-section of rural, resort and forestry and it trades much more liquid than the underlying land.

This is just my humble opinion but JOE stock falling from a peak trading range of $70-80 per share to a more recent trading range of $30-40 per share is as good a reflection as you'll find anywhere of where prices are likely to bottom for land in Nwest Florida.

In other words, land will have fallen about 50% from the peak when prices have bottomed. JOE stock got to the bottom quicker and will also reflect the slow climb back faster than the land itself.

My $.02

SHELLY, I thought shorting was now illegal?

Shorting stocks is not illegal.

The SEC produced a list of companies which traders are temporarily banned from shorting...JOE wasn't on the list.


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Excellent question! Are shorters like flippers?

No, shorters aren't like flippers--"Day-traders" are like flippers...only without the insurance payments, HOA fees, maintenance costs, 6% commission to sell and granite countertops.

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It happens to the best of us.

I have no personal interest in pumping the stock I just think it's a great time to buy the stock. I do think that JOE stock is the best indicator out there for anyone who actually owns land in SoWal of what the value of your asset is (I'm still dreaming of the day when I can say I own a piece of paradise)

As for JOE's stock price, I don't know of a single place in the US that has as good a barometer of the value of land than JOE is for Nwest Florida. It's holdings are a great cross-section of rural, resort and forestry and it trades much more liquid than the underlying land.

This is just my humble opinion but JOE stock falling from a peak trading range of $70-80 per share to a more recent trading range of $30-40 per share is as good a reflection as you'll find anywhere of where prices are likely to bottom for land in Nwest Florida.

In other words, land will have fallen about 50% from the peak when prices have bottomed. JOE stock got to the bottom quicker and will also reflect the slow climb back faster than the land itself.

My $.02

Thanks. Your thoughts are pretty much what I was thinking when I got it. I do not have much money to play with, so I tend to wait a long time, buy something, hold it until it doubles then sell half and do it again. Been doing that for about 10 years now and so far it has worked. I started with a chip maker called IDTi and now I have Microsoft, Prepaid Legal, and St. Joe. I looking for one more.

If JOE does not manufacture anything and sells the only product it owns (land) how will its stock ever be worth more than it is today? The way I understand it the value of its stock should continue to decrease until it closes shop.

Wouldn't someone looking for a valuation on JOE simply calculate the value of its total land and divide it into the total shares of stock?

Great question. When JOE sells off the land anything not used to pay expenses will stay on the balance sheet, be re-invested somewhere or paid back to the shareholders in the form of dividends or stock buy backs.

Re-investments can be through joint ventures or operating companies managing resort properties, as an example.

When the market comes back to life, and JOE is able to start selling it's assets, how JOE decides to steward that capital (dividends, reinvestments, buybacks, etc.) will be another data point to re-evaluate the long-term attractiveness of the stock.

Thanks for the points. I'd love to hear what Smilin Joe, Goofer44 and TheSheep have to say about the idea. All three seem to be pretty well versed on these concepts.

I know I should be more thoughtful. I don't know why I never thought of JOE as a company who would actually try to grow their business into new areas beyond the liquidation of their holdings.

Thanks for the points. I'd love to hear what Smilin Joe, Goofer44 and TheSheep have to say about the idea. All three seem to be pretty well versed on these concepts.

I know I should be more thoughtful. I don't know why I never thought of JOE as a company who would actually try to grow their business into new areas beyond the liquidation of their holdings.

Expect JOE to reinvent itself as it becomes cash heavy, acquisitions such as the Arvida deal (not necessarily that direction) launched JOE into the development business bigger-time without the pangs and pains. As the years toll on, there will be regionally strong developers who have the infrastructures, market positions and raw land in areas south from most of JOE's holdings.

There is also the potential mix of placing debt and equity on properties that they have no development stake.

Thanks for the points. I'd love to hear what Smilin Joe, Goofer44 and TheSheep have to say about the idea. All three seem to be pretty well versed on these concepts.

I know I should be more thoughtful. I don't know why I never thought of JOE as a company who would actually try to grow their business into new areas beyond the liquidation of their holdings.

One additional possibility. The unpermitted lands may be useful, (HABU MOF) as mitigation banks. Most JOE middle-of-somewhere land that I have seen meet the criteria i.e. they need restorative work, or complete overhauling, to return them to their original eco-viability or to a planned need (uplands protecting wetlands, buffering, seagrass/marsh enhancements yada talk talk yakkity yak I will come back. :funn:Mitigation credits are increasing in price with no relationship to land price stagnation.

Isn't there some proximity criteria to mitigation lands? I thought it had to be located within a certain distance of the environmentally encumbered piece.

Isn't there some proximity criteria to mitigation lands? I thought it had to be located within a certain distance of the environmentally encumbered piece.

I am certainly no expert, but I do not believe so. I have overheard conversations where people are buying rights to land miles away from where they are going to take the wetlands in order to get a project approved.

I am certainly no expert, but I do not believe so. I have overheard conversations where people are buying rights to land miles away from where they are going to take the wetlands in order to get a project approved.

Typically, you purchase mitigation credits from an established mitigation bank to offset unavoidable impacts at your development project, it is most suitable to purchase those credits from within the same geography, watershed or similar ecosystem.

If you purchase land away from your development project and mitigate/restore it, it is more costly, riskier and much more time consuming especially if the land purchased is outside of your development project geography, watershed or similar ecosystem.

I'm no accountant but I don't believe JOE will be exchanging any of their existing property for property they don't already own.

As far as the point of view that JOE is overvalued it all comes down to the assumptions.

Is a reasonable assumption around entitled acreage really as low as $100,000 per acre? I don't ever recall a time in the past 8 years when you could buy a full acre in any JOE community for anything close to $100K. I could be mistaken - it's been known to happen.

I also think the margin assumptions are pessimistic. When values stabilize (it will happen eventually), JOE's "adjusted" model is pretty well positioned to do better than 50% margins.

I can guarantee you this: the market will rise and fall going forward. That you can bet your house on!

by "all they want" i am referring to a portion of sales for more low basis land as they have done in the past...no taxes due

Expect JOE to reinvent itself as it becomes cash heavy, acquisitions such as the Arvida deal (not necessarily that direction) launched JOE into the development business bigger-time without the pangs and pains. As the years toll on, there will be regionally strong developers who have the infrastructures, market positions and raw land in areas south from most of JOE's holdings.

There is also the potential mix of placing debt and equity on properties that they have no development stake.

I'm not sure how the Arvida deal ever worked in JOE's favor. That was a lemon from day one.