Joe closes on 19,917 acres

[Kurt]

The St. Joe Company (NYSE: JOE) today said that it has closed the sales of 19,917 acres of non-strategic rural land in Liberty and Gulf Counties for an aggregate sales price of $28.0 million, or over $1,400 per acre.

"After the termination in October of a previously announced contract for the sale of non-strategic rural conservation land we returned those parcels to the market," said JOE's president and CEO Britt Greene.

"These sales are evidence of our ability to execute our strategic plan in an orderly manner. These closings further strengthen our cash position and virtually debt-free balance sheet, better positioning JOE to withstand this prolonged economic downturn. Going forward, we will continue to prudently manage our inventory and assets to enhance long-term shareholder value."

 

[AAbsolute]

The St. Joe Company (NYSE: JOE) today said that it has closed the sales of 19,917 acres of non-strategic rural land in Liberty and Gulf Counties for an aggregate sales price of $28.0 million, or over $1,400 per acre.

"After the termination in October of a previously announced contract for the sale of non-strategic rural conservation land we returned those parcels to the market," said JOE's president and CEO Britt Greene.

"These sales are evidence of our ability to execute our strategic plan in an orderly manner. These closings further strengthen our cash position and virtually debt-free balance sheet, better positioning JOE to withstand this prolonged economic downturn. Going forward, we will continue to prudently manage our inventory and assets to enhance long-term shareholder value."

There's something that has troubled me about JOE's business plan for some time. How does selling off assets "enhance long-term shareholder value?"

Doesn't this mean that the more success in liquidating assets, the closer to closing out all business?

 

[SHELLY]

There's something that has troubled me about JOE's business plan for some time. How does selling off assets "enhance long-term shareholder value?"

Doesn't this mean that the more success in liquidating assets, the closer to closing out all business?

...it gives the illusion of enhancing shareholder's "value" by having some kind of earnings to report each quarter.

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[AAbsolute]

...it gives the illusion of enhancing shareholder's "value" by having some kind of earnings to report each quarter.

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I need to get some data from JOE's statements to figure this one out. Maybe a rating type agency could explain it better. I don't know all of JOE's business plan.

If I understand it, JOE sells land that it owns. According Tom Dodson and Ken Borick, We are not in the paper business anymore. We sell land to pay company expenses.

How is this regimen different from an orderly shut-down?

 

[traderx]

I need to get some data from JOE's statements to figure this one out. Maybe a rating type agency could explain it better. I don't know all of JOE's business plan.

If I understand it, JOE sells land that it owns. According Tom Dodson and Ken Borick, We are not in the paper business anymore. We sell land to pay company expenses.

How is this regimen different from an orderly shut-down?

Couldn't you say the same about the oil industry?

 

[AAbsolute]

Couldn't you say the same about the oil industry?

I think the oil industry is seeking and aquiring new oil. It doesn't sound like JOE is seeking and acquiring new land. What land they do purchase would be more akin a tool in the oil industry.

 

[YoungFT]

Here's what you gotta believed to invest in JOE:

- They will sell 685,000 acres over the next 20-30 years
- Grade A acreage will fetch 180-220K per acre
- Grade B will fetch 60-90K per acre
- Grade C will fetch 1.8 - 2.2K per acre

Cost to sell the land will be 50% - 20% price of the land. They will pay taxes on any profit. And land will appreciate over that 20-30 yr period at about 3% per year.

The cash these sales generate not only goes to pay expenses but what's left gets reinvested somewhere else - resort management, stock buybacks, new business ventures, general development opportunities in the State of Florida, etc.

To invest in JOE you need to believe that the management can generate sales, and not only earn a nice profit but REINVEST those profits in other value creating activities.

There is not much happening in sales or investments with JOE in this environment but my hope and assumption is that if you have some patient capital, in 10 years, an investment in JOE at these prices will outperform alternatives.

You can't see some of those pictures from Watersound / Watercolor that AA posted and not see something magical. Just my very humble opinion.

 

[AAbsolute]

Here's what you gotta believed to invest in JOE:

- They will sell 685,000 acres over the next 20-30 years
- Grade A acreage will fetch 180-220K per acre
- Grade B will fetch 60-90K per acre
- Grade C will fetch 1.8 - 2.2K per acre

Cost to sell the land will be 50% - 20% price of the land. They will pay taxes on any profit. And land will appreciate over that 20-30 yr period at about 3% per year.

The cash these sales generate not only goes to pay expenses but what's left gets reinvested somewhere else - resort management, stock buybacks, new business ventures, general development opportunities in the State of Florida, etc.

To invest in JOE you need to believe that the management can generate sales, and not only earn a nice profit but REINVEST those profits in other value creating activities.

There is not much happening in sales or investments with JOE in this environment but my hope and assumption is that if you have some patient capital, in 10 years, an investment in JOE at these prices will outperform alternatives.

You can't see some of those pictures from Watersound / Watercolor that AA posted and not see something magical. Just my very humble opinion.

It sounds like you are describing a diversified holdings company with no debt. Since they converted from paper to real estate all I have seen is liquidation without qualified reinvestment. It really looks like an orderly shut-down vs. a growth company. Selling off 20,000 acres with intentions to sell off all the rest doesn't square with me as creating shareholder value.

I have long said that there is no one who can compete with JOE's competitive advantage. Besides it would be business suicide to try and compete with a company liquidating.

 

[Creeklover]

I think they sold the land to use the money to but Deer Lake Park

 

[SHELLY]

There is not much happening in sales or investments with JOE in this environment but my hope and assumption is that if you have some patient capital, in 10 years, an investment in JOE at these prices will outperform alternatives.

..."patient capital?" ...more like patient on life support.

Better to take the capital and invest it in a company that actually makes things, has positive cashflow and throws out a dividend--all of which doesn't describe JOE.

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