St. Joe: Fond of Florida

05/30/2003 12:00 am EST


Richard Young

Editor, Young's Intelligence Report

Richard Young, editor of Intelligence Report, has an uncanny knack for uncovering exciting value plays that most others on Wall Street have never heard of.  Such is the case with St. Joe, the largest private landowner in the state of Florida, with virtually no recognition on Wall Street.  Here's Young's overview of the stock and its long-term potential:

"St. Joe (JOE NYSE) is the largest private landowner in Florida, holding almost one million acres. The company owns a significant portion of the remaining developable coastal land in Florida. Joe's holdings include five miles of white-sand beaches, 39 miles of Gulf of Mexico coastline, and hundreds of miles of near-coast waterfront. In each of the next 10 years, the number of baby boomers between the ages of 45 and 60 will increase, peaking at around 60 million. And coastal Florida will be a favorite destination."

"WaterSound Beach, an Arvida/St. Joe community, is a master planned community; this unique new coastal Florida village is located halfway between Destin and Panama City Beach. WSB is 256 acres of magnificent land along the Gulf of Mexico. The completed master plan will include 499 residences, as well as a village center, landscaped parks, and recreational buildings. Consider this: Just six years ago, St. Joe used its vast land holdings for one purpose: to grow wood fiber for a paper mill. Viewed as timberland, the company's one million acres were valued at under $1,000 per acre. Now it's a whole new ballgame as St. Joe moves into a full-scale value cycle approach to development. Get out a map of Florida and run your finger west of Tallahassee and down to the water at Port St. Joe. Say good-bye to the stinky mill. Demolition of the mill is scheduled to conclude by the end of 2003, which will clear the way for economic development of this strategically located waterfront site. Let me tell you, Port St. Joe is a ground-floor opportunity."

"Meanwhile, the company spent $150 million in 2002 to buy back over five million shares of its stock (the fewer the shares outstanding, the higher the earnings/share for the remaining shares). I look for $150 million of stock to be repurchased this year. You, the shareholder, will be the distinct beneficiary of this enormous stock buyback program. I've listed St. Joe as the #1 pick on my common stock countdown this month. I'd like you to add this land baron to your own buy list and set up a plan to add to your holdings regularly over the years."

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