St. Joe (NYSE: JOE): How to Pay $3,200 for Florida Beachfront Property
By Dr. Steve Sjuggerud, President, Investment U
Friday, September 19, 2003: Issue #274
We heard many brilliant investment ideas at yesterday’s Alliance conference put on by PirateInvestor.com. Of those ideas, the most exceptional one may have been Dan Ferris’ “properties for pennies on the dollar” recommendations.
How would you like to own 39 miles of pristine Florida coastline near Panama City Beach at a 90% discount to what it’s worth? You can, very easily – and it won’t cost you hundreds of thousands of dollars. In fact, a hundred shares of St. Joe – the largest landowner in the state of Florida – will only cost you about $3,200.
Shares of St. Joe (NYSE: JOE) are currently selling for about $32. In Dan’s latest Extreme Value newsletter, he calls the stock a “buy” up to $59. So that tells me he considers St. Joe to STILL be an “extreme value” even if it nearly doubles from here. Conservative Dan will even tell you that he expects to quadruple his money in the next few years with this investment. So what’s the story?
St. Joe: Developing 15,911 Acres of Pure Profits
“St. Joe owns a significant portion of the remaining developable coastal land in the state of Florida,” Dan tells us. It owns 428,000 acres of land within 10 miles of the Gulf Coast in Florida’s panhandle, including 39 miles of coastline. In addition, St. Joe has 261 miles of waterway frontage near the coast and an additional 249 miles of waterway frontage accessible by recreational boats. With nearly a million total acres, St. Joe owns about 3% of the state.
Today St. Joe’s main business, as Dan says, is “milking the value out of its vast land holdings in northwest Florida.” And business is good. Dan says, “All along the Florida panhandle, from Pensacola to Panama City, waterfront homes are appreciating at 10 to 20% a year.”If you are interested in diversifying some of your investment dollars into property and property development, but you don’t want to have to take out a big loan or go deep into debt, and you want to get in at an extraordinary price, you may want to consider the land stocks that Dan recommends stocks like St. Joe.Thanks Dan, for the good idea?
Dan then continues:
St. Joe has developed or is currently building about 19 developments on a total of 15,911 acres Beachfront homes and condos at St. Joe’s WaterColor development sell for between $500,000 and $1.4 million. Empty lots at WaterColor are worth around $61 per square foot. That’s just under $2.7 million per acre Empty lots at St. Joe’s WindMark Beach already sell for more than $1 million an acre.
Buying this St. Joe Stock Is Like Paying 10 Cents on the Dollar!
Dan does some fancy math, settling on a conservative guess for the value of all of St. Joe’s land at just over $20,000 an acre – which means St. Joe is worth about $20 billion (actually Dan believes it’s worth more than that). Yet the stock is only valued at closer to $2 billion. If Dan is even close, buying St. Joe now is the equivalent of buying into the largest chunk of available waterfront land in Florida at nearly 10 cents on the dollar. I don’t know how you can beat that.
In addition to St. Joe, Dan identified similar property opportunities at similar discounts – the largest private landowner in California in Hawaii and more.
Good investing,
Steve
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