Companies That Go Back to the Land

St. Joe has exited the homebuilding business and pared back land holdings to 607,000 acres, from 739,000 last year and 800,000 in 2006. Nearly 70% (426,000 acres) is within 15 miles of the Gulf of Mexico coastline, a statistic that tends to draw interesting reactions from those who either like or dislike the company.

St. Joe appears to be on the offensive, having reduced debt to $51 million in the third quarter, from $540 million at year-end 2007, although this was done through proceeds of a common stock offering in March 2008. The company continues to pin its hope on the completion of the Panama City Airport, which sits near 75,000 acres of St Joe owned property.

Real estate sales have indeed tanked for St Joe, but the company is without a doubt leaner, with $106 million in cash and much reduced debt load. All eyes will be on the Panama City Airport project and on whether the expected completion date of May 2010 is realistic. St. Joe is not currently profitable and is expected to earn just 13 cents a share in 2009, according to consensus estimates, although the company is currently covered by few analysts. Five institutions own nearly 66% of shares (Janus 14%, Marsico Capital 13.5%, Third Avenue Management 13.5%, T Rowe Price 13% and Fairholme 12%).

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Know What You Own: In midday trading, Cresud (CRESY - commentary - Cramer's Take), Pico Holdings (PICO - commentary - Cramer's Take), Plum Creek Timber (PCL - commentary - Cramer's Take), Potlatch (PCH - commentary - Cramer's Take), Rayonier (RYN - commentary - Cramer's Take) and Tejon Ranch (TRC - commentary - Cramer's Take) were gaining.

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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.