St Joe stock appears to rebounding, why?

[YoungFT]

how do they figure 35 percent when joe can 1031 all they want?

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!

 

[AAbsolute]

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!

My Friend, I think Rivercamps is currently selling for below 100,000 per acre when you consider the overall scope of the neighborhood and divide that by the number of lots. It could be true for Watersound North as well.

 

[Miss Kitty]

:roll:...it is rebounding because I am coming back to WC.

 

[Jim Tucker]

Disney is a rumor they batt around every so often to goose the RE market - like the Freeport Ritz-Carlton!

Bear in mind that the last time Disney made a major land purchase in Florida, they did it w/ a level of secrecy the CIA would do well to emulate.

That's the point. By buying St. Joe they get everything in one fell swoop at the price of the stock, not the real estate. I doubt it's true but it's different than the same old rumor we've been hearing for 30 years about land purchase.

 

[fisher]

how do they figure 35 percent when joe can 1031 all they want?

I don't believe you can 1031 in a cash sale. Only when you swap like kind property. Are you saying that Joe won't be selling any land for cash, they will only be trading land for land in the future??????

 

[fisher]

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!

You need to consider the green space, common areas, etc in calculating the sales price per acre. You also need to consider ALL JOE entitled acres, not just the small portion they own along 30A. The properties in Deland, Jacksonville and Tallahassee will likely sell for well below $100k and only a small portion of the entitled property is in premier locations like Watercolor and Watersound.

In fact, $100k might be way TOO HIGH for an average.

 

[YoungFT]

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!

 

[Matt J]

SHELLY, I thought shorting was now illegal?

 

[yorkshireman]

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.

 

[AAbsolute]

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.