Companies That Go Back to the Land

One of the more interesting areas of the market to me is raw land. They aren't making any more of it, and it happens to be a major holding of dozens of publicly traded companies. While many of these companies are too small and too thinly traded to bear mention in this column, several decent-sized firms are worth a look.

While the one thing they have in common is that most were trounced in 2008, that's often where the similarities end. Some find themselves in very different businesses, and for others, land is secondary in nature to their main operating business. Below is a table that lists some companies with major land holdings. It is by no means an exhaustive list of landholders, and if your favorite is not mentioned, feel free to contact me via email.

Some of the more interesting names:

Alexander & Baldwin (AXB - commentary - Cramer's Take): This Honolulu-based company garners most of its revenue through its ocean transport business Matson Navigation, which serves routes between the West Coast and Hawaii. In fact, Matson is the primary carrier between the U.S. mainland and Hawaii. Falling oil prices should help; in 2007 the company burned 2.3 million barrels.

Lesser known, perhaps is A&B's real estate business, which includes 89,000 acres, some of it high-quality land, carried on the books at next to nothing, plus an additional 7.9 million square feet of commercial real estate in Hawaii and several other states. Currently trading at 7 times trailing earnings and 9 times 2009 estimates, Alexander & Baldwin currently yields 4.9%.

St. Joe (JOE - commentary - Cramer's Take): Somewhat controversial, St. Joe has been loved and hated, and it currently sits in the hated category. A favorite of short-sellers, the company has seen its stock price fall dramatically in the past few years as the Florida real estate market has imploded, and some have raised questions as to the true quality and value of the company's real estate portfolio.

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At the time of publication, Heller was long PICO, TRC and CRESY.

Jonathan Heller, CFA, is president of KEJ Financial Advisors, a fee-only financial planning he recently launched. Jon spent 17 years at Bloomberg Financial Markets in various roles, from 1989 until 2005. He ran Bloomberg's Equity Fundamental Research Department from 1994 until 1998, when he assumed responsibility for Bloomberg's Equity Data Research Department. In 2001, he joined Bloomberg's Publishing group as senior markets editor and writer for Bloomberg Personal Finance Magazine, and an associate editor and contributor for Bloomberg Markets Magazine. In 2005, he joined SEI Investments as director of investment communications within SEI's Investment Management Unit.

Jon is also the founder of the Cheap Stocks Web site, a site dedicated to deep-value investing. He has an undergraduate degree from Grove City College and an MBA from Rider University, where he has also served on the adjunct faculty; he is also a CFA charter holder.