There were two good articles on St. Joe recently. For anyone living in a cave, Bruce Berkowitz of Fairholme Fund, is the largest shareholder of JOE, and David Einhorn of Greenlight Capital, is short of the company. Both are widely recognized as excellent value investors, and have incredible track records.
An article in Barrons, was bearish on the company, stating that:
St. Joe shares (JOE, Financial), at 27, could go much lower if Berkowitz is unable to realize significant value from the company's vast holdings of 574,000 acres, or almost 900 square miles. The land is mostly in the Panhandle, and much of it is forest, with just 41,000 acres "entitled" for development. It could take decades to develop it all, given the pace of sales. Last year, St. Joe sold just 3,000 acres.
The article stated that Einhorn, Berkowitz and St. Joe, all refused to comment.
The full link is here- St. Joe Project: More Sinner Than Winner
An article published this morning on Bloomberg, discussed Bruce Berkowitz's plans as the new chairman of the company to cut costs. In a previous article I stated that the only thing I think Berkowitz can really do is cut costs. Berkowitz is now going to attempt to do that but it obviously remains to be seen whether that will be successful or not. The article quoted berkowitz as stating that“Everything is on the table -- all litigation, all other professional services,” and “The problem with Joe has been that corporate overhead expenses have sometimes forced the company to sell valuable assets at too low a price. So we’re going to cut the overhead.”
Berkowitz is not worried about the recent SEC investigation into JOE, commenting: “Do you think the auditors would allow any sort of liberal policies given the stink about valuations?” I am skeptical about Berkowitz's claim, because auditors are notorious for enabling companies to committ fraud. Sometimes it is a conflict of interest, other times it is incompetence. Arthur Anderson and Enron, and now the allegations againstErnst Young regarding Lehman Brothers are good examples of why auditors get it wrong. David Einhorn notes in his book Fooling Some of the People All of the Time (which I reviewed here.),how the auditors also signed off on Allied Capital's financial statements despite serious concerns of fraud. These allegations were finally "proven" in 2008, when the company was on the brink of bankruptcy.
the full article can be found at the following link - Berkowitz Says St. Joe to Reduce Costs, Consider Ending Oil-Spill Lawsuits
The best bull case I have seen for St. Joe was posted last week by Todd Sulivan of valueplays.net/. The article is titled JOE Earnings and Revisiting Einhorn’s “Valuation” & Ommission.
Disclosure: None
http://www.valuewalk.com/
An article in Barrons, was bearish on the company, stating that:
St. Joe shares (JOE, Financial), at 27, could go much lower if Berkowitz is unable to realize significant value from the company's vast holdings of 574,000 acres, or almost 900 square miles. The land is mostly in the Panhandle, and much of it is forest, with just 41,000 acres "entitled" for development. It could take decades to develop it all, given the pace of sales. Last year, St. Joe sold just 3,000 acres.
The article stated that Einhorn, Berkowitz and St. Joe, all refused to comment.
The full link is here- St. Joe Project: More Sinner Than Winner
An article published this morning on Bloomberg, discussed Bruce Berkowitz's plans as the new chairman of the company to cut costs. In a previous article I stated that the only thing I think Berkowitz can really do is cut costs. Berkowitz is now going to attempt to do that but it obviously remains to be seen whether that will be successful or not. The article quoted berkowitz as stating that“Everything is on the table -- all litigation, all other professional services,” and “The problem with Joe has been that corporate overhead expenses have sometimes forced the company to sell valuable assets at too low a price. So we’re going to cut the overhead.”
Berkowitz is not worried about the recent SEC investigation into JOE, commenting: “Do you think the auditors would allow any sort of liberal policies given the stink about valuations?” I am skeptical about Berkowitz's claim, because auditors are notorious for enabling companies to committ fraud. Sometimes it is a conflict of interest, other times it is incompetence. Arthur Anderson and Enron, and now the allegations againstErnst Young regarding Lehman Brothers are good examples of why auditors get it wrong. David Einhorn notes in his book Fooling Some of the People All of the Time (which I reviewed here.),how the auditors also signed off on Allied Capital's financial statements despite serious concerns of fraud. These allegations were finally "proven" in 2008, when the company was on the brink of bankruptcy.
the full article can be found at the following link - Berkowitz Says St. Joe to Reduce Costs, Consider Ending Oil-Spill Lawsuits
The best bull case I have seen for St. Joe was posted last week by Todd Sulivan of valueplays.net/. The article is titled JOE Earnings and Revisiting Einhorn’s “Valuation” & Ommission.
Disclosure: None
http://www.valuewalk.com/
