Summary
JOE is an early-stage REIT-like company that owns 177,000 acres in the panhandle of FL.
JOE’s stock price has been a value trap for decades. Trapped between a large asset value vs. excessive corporate overhead and low recurring net profits.
JOE’s corporate cost structure is now in line with recurring revenues. Corporate overhead has dropped from $97.4m (2007) to $20.6m (2018). Capex per employee is currently at a record high.
For the first time since we have been following JOE, we can do a back of the envelope calculation and see how the value of the company could go up.
JOE’s development project spending in the next two to three years, in our estimate, will be close to the total project development spending for the last 10 years ($278M).
The Panhandle of FL has recovered from the housing crisis. St. Joe (NYSE:JOE) has aligned their cost structure and, for the first time, has operating leverage. Because of the poor performance of the stock and capital spending missteps and high corporate overhead of the past, many investors have given up on JOE generating sustained profits. JOE's current strategy of targeted capex and JV partnering, combined with new opportunities, puts the company in the best position it has ever been to finally generate recurring revenues and profits. We think the shares will get revalued as numerous development projects begin to generate sustainable revenues growth.
At first, it's somewhat hard to grasp JOE's vast land holdings, numerous development projects, capital spending, history and the qualities of each development project. Having visited each location and met with JOE's CFO, Marek Bakun, recently at JOE's headquarters, the following is a summary of our research.
The company has been through 4 stages since the 1930s. First, a timber and paper company. Then, during the housing boom, they were a large-scale and high-cost development company, supplemented largely by land sales. After the housing bubble burst, there have been about 12 years of the area's recovery as JOE instituted cost controls and refined their strategy. Now, as we see it, JOE can finally capitalize on its real estate holdings, and the shareholders can benefit. We would describe JOE as a REIT-like company with very large land holdings (carried at almost no costs) that is focused on recurring revenues from leisure, commercial, hospitality, and to a lesser degree timber sales. Revenues are also supplemented with residential lot sales.
CLICK LINK FOR COMPLETE REPORT:
St. Joe Is Nearing A Tipping Point - The St. Joe Company (NYSE:JOE) | Seeking Alpha
JOE is an early-stage REIT-like company that owns 177,000 acres in the panhandle of FL.
JOE’s stock price has been a value trap for decades. Trapped between a large asset value vs. excessive corporate overhead and low recurring net profits.
JOE’s corporate cost structure is now in line with recurring revenues. Corporate overhead has dropped from $97.4m (2007) to $20.6m (2018). Capex per employee is currently at a record high.
For the first time since we have been following JOE, we can do a back of the envelope calculation and see how the value of the company could go up.
JOE’s development project spending in the next two to three years, in our estimate, will be close to the total project development spending for the last 10 years ($278M).
The Panhandle of FL has recovered from the housing crisis. St. Joe (NYSE:JOE) has aligned their cost structure and, for the first time, has operating leverage. Because of the poor performance of the stock and capital spending missteps and high corporate overhead of the past, many investors have given up on JOE generating sustained profits. JOE's current strategy of targeted capex and JV partnering, combined with new opportunities, puts the company in the best position it has ever been to finally generate recurring revenues and profits. We think the shares will get revalued as numerous development projects begin to generate sustainable revenues growth.
At first, it's somewhat hard to grasp JOE's vast land holdings, numerous development projects, capital spending, history and the qualities of each development project. Having visited each location and met with JOE's CFO, Marek Bakun, recently at JOE's headquarters, the following is a summary of our research.
The company has been through 4 stages since the 1930s. First, a timber and paper company. Then, during the housing boom, they were a large-scale and high-cost development company, supplemented largely by land sales. After the housing bubble burst, there have been about 12 years of the area's recovery as JOE instituted cost controls and refined their strategy. Now, as we see it, JOE can finally capitalize on its real estate holdings, and the shareholders can benefit. We would describe JOE as a REIT-like company with very large land holdings (carried at almost no costs) that is focused on recurring revenues from leisure, commercial, hospitality, and to a lesser degree timber sales. Revenues are also supplemented with residential lot sales.
CLICK LINK FOR COMPLETE REPORT:
St. Joe Is Nearing A Tipping Point - The St. Joe Company (NYSE:JOE) | Seeking Alpha
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