St. Joe’s (NYSE:JOE) entitled land, resort assets, commercial properties, and ample cash pile are presently priced below a reasonable estimate of intrinsic value. As important, St. Joe is more focused than ever on increasing shareholder value in the coming years through expanding its portfolio of income producing assets. Currently, the market values all of St. Joe at $6,800 per acre of owned land or about $5,100 per acre net of the company’s cash and short-term liquidity portfolio. We are hard pressed to find cheaper comparables considering:
- St. Joe’s increasing growth initiatives, including Latitude Margaritaville, a joint venture with Minto Communities and Margaritaville Holdings to create a 55-and-better community located about six miles off the coast and just north on the Inter Coastal Waterway, with the first phase of 3,000 homes projected to open in early 2020.
- St. Joe’s leasable commercial property has grown over 44% to 813,000 square feet over the past few years, with occupancy now up to 87% leased.
- Airport capacity at Northwest Florida Beaches International Airport has increased from one airline carrier in 2009 to four, with passenger traffic up 300% as the airport soon approaches the one million annual passenger mark.
For these reasons and others, you can begin to understand why St. Joe has repurchased nearly one-third of its outstanding shares over the past few years and why St. Joe is the largest position in The Fairholme Fund (Trades, Portfolio).
