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St. Joe 2014 Stock Performance

Discussion in 'Real Estate' started by coondog, Dec 31, 2014.

  1. coondog

    coondog Beach Lover

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    JOE underperformed the market by 15% for the year with over a 4% loss for shareholders versus average market gains of over 11%. Fifth year in a row of underperformance relative to market averages, and fourth year of the past five where they have lost money for shareholders. Simply astonishing, yet unsurprising considering the institutional arrogance displayed throughout the organization and their continued inability to understand how to treat their customer base.
     
  2. Fish575

    Fish575 Beach Comber

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    Coondog do you like to hunt bear?

    You have been consistently on the negative side of St. Joe. You are very perceptive and I would like to know what you think about St. Joe not holding a conference call for analysts and investors last quarter means along with its lack of information on how it plans to use its cash.

    Also, do you know anything about the Deepwater Horizon settlement and St. Joe. St. Joe had been listing the litigation in its 10K/10Q and annual report but it was omitted from the last 10K.

    I am amazed with how poorly the company communicates with investors based on its board composition and links to LUK.

    I am waiting for a new CEO to be named and a coherent strategy outlined. Based on the available articles on the long-term Walton/Bay plan the cash burn in the upfront years is minimal and kinda back-end loaded, do you think a dividend is upcoming in the first half of 2015?
     
    Last edited: Jan 2, 2015
  3. Fish575

    Fish575 Beach Comber

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    Also, while we are on the subject.

    What is your take on St. Joe cashing out the AgResources timber note and not using the funds yet?

    Why did the board out Park Brady when his background is in rental management (ResortQuest) which is the direction that St. Joe Club and Resorts program is going. It looked to me that Park Brady had the right skillset to guide St. Joe away from revenue based on one-time non-recurring land sales to revenue based on rental income that is recurring. The transformation of the Watersound Beach Club and Camp Creek into a major selling feature of the St. Joe rental program is/was messy but it does position St. Joe Club & Resorts with a competitive advantage over other rental companies in the 30A area for both the homeowner and renter.

    Also. the management of the Pearl and Pier Park North fit in with this strategy but Park Brady was not allowed to implement fully the strategy as was the Chateau 30A condos that never materialized.
     
  4. Rex

    Rex Beach Comber

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    buy low sell high
     
  5. coondog

    coondog Beach Lover

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    JOE hit a new 52 week low today during the trading day.

    My understanding was that Brady was forced out in a power struggle with Bienvenue, as how often do you see CEO's retire "immediately". If you go back and review their business strategies over the past four to five years, you will note that they tend to change around every 15 - 18 months, and when unsuccessful, it changes again. It began with focusing on development of the commercial land around the PCB airport, which has been a complete disaster, then onto real estate development, which went nowhere, then to developing the Port of St. Joe which is a total non-starter for any number of reasons, to a resort program, which to be fair has had limited success, and now to developing out Watersound North (Origins). They have plenty of cash to execute as they have bulk sold over half of their real estate portfolio, yet the question continues to be if they have the expertise to pull it off, and the conventional wisdom appears to be that they simply do not. While the resort program has had limited success, even with giving away free memberships to the Watersound Beach Club and access to the Camp Creek and Shart Tooth golf courses, they have made little inroads into securing market share. Several reasons for that, include their refusal to use VBRO, the most commonly used vacation rental search engine in the country, as they believe that their proprietary system is better, even though that few people know it exists. I have yet to talk to a single person who went with them since launch that didn't a) see a measurable decline in revenue, and b) experience terrible customer service. The ulitimate head of their resort program, whom has defined himself in their brochures as "a real estate visionary", has a criminal justice education, coupled with being a beverage and cigar distibutor. The fact that they elected to not do a call with analysts at the end of the third quarter, which is the first time that this has happenned as far back as I know, is quite telling, even though they are only followed by I believe two firms. Despite spinning every earnings press release, the fact of the matter remains that on a pure operating basis, I do not believe that they have been profitable for more than two quarters over the past four to five years. They even went so far this year to try to cheat during the Watersound Beach Board elections, where they have the option to either a) appoint a member to the Board, or b) submit a vote for each of their lots/homes. Instead, they attempted to do both, and luckily, one of the homeowner's charged with counting the ballots caught them in the act.
     
  6. Fish575

    Fish575 Beach Comber

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    I agree with you. I had forgotten about the Port St. Joe ideas. I just have trouble squaring up St. Joe's actions with the background of the members on the Board of Directors. To me the actions of St. Joe are too financially naive to consistently be approved by the St. Joe board. The ties to Leucadia National Corp. and Fairholme are too deep.

    For example, any bit of good news from St. Joe would likely cause a short squeeze and a quick move in the stock price above the mid 20s. I cannot figure out why St. Joe cashed in the timber notes (I think that is what they were called) on its huge land sale and has done nothing with the cash. Why incur the cost if the company has no plans to use the cash or at least announce how it plans to use the cash?

    Do you think St. Joe will announce a new CEO and how it plans to use the cash horde before the Q1 results are announced?
     
  7. coondog

    coondog Beach Lover

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    Stock is continuing to set 52 week lows throughout the New Year. Balance sheet essentially consists of cash and remaining land that they didn't bulk sell last year. A dividend does nothing than drive the stock value down as they continue to loss money on an operating basis, and cannot replace the dividended capital through earnings growth as there hasn't been any for years now.
     

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