NEW YORK (TheStreet) -- A conference last week in Arizona reminded me just how dry parts of our country and the world are, and how frequently I take water for granted.

Upon returning from my first mission trip in the Dominican Republic several years ago, a place where clean water is not easily accessible as it is here in the United States, I vowed to never again view a glass of clean, drinkable H2O as I once had. But human nature often takes over, and those stark reminders of just how fortunate we are to have an abundant supply of clean water, at least in the East, often fade away. But the desire to have some exposure to water in the portfolio remained.

Eleven years ago, I stumbled onto a little-known company, PICO Holdings ( PICO - Get Report), a mini-conglomerate that I referred to as the "poor-man's Berkshire Hathaway". At that time PICO, an asset-rich business, owned among other things, a vast amount of Nevada land, a water business, and two insurance companies. It was a misunderstood company with valuable assets; a value investors' dream.

It turned out to be a great purchase as shares more than quadrupled between late 2002 and early 2007, as institutions and investors caught onto the story. But the great market meltdown of 2008 punished PICO severely, pushing it into the high teens. Five years later, shares stand at about $22.50, up less than 25% since bottoming. Unlike most positions that I take, I have been in and out of PICO several times over the years.

The company has changed since I first purchased shares. The 1.2 million acres of Nevada land has been sold, as have the two insurance companies. My primary reason for owning shares, however, the water resource and storage operations, Vidler Water Company, remains, and this is arguably the company's most valuable asset.

In 2008, seeking to capitalize on the residential real estate bust, PICO formed UCP ( UCP), which acquired developable land, developed lots and finished lots in certain California and Washington markets. That business generated about 39% of total 2012 revenue. This past July, PICO took UCP public, selling 42% of its stake, which raised $108 million. PICO's stake is worth about $63 million

The company went whole hog into the agriculture business in 2010 via its new canola oil and canola meal business, PICO Northstar Hallock, which is now in full production. While early results for this business have been disappointing, as canola crush margins are at ten-year lows, the future appears to be much brighter.

PICO's balance sheet remains strong, and the company ended last quarter with $67 million in cash, and $49 million in investments (debt and equity securities). The company currently trades at just 1.12 times book value per share.

The question is why shares have not performed better over the past several years, and why this company seems to be the perennial small unknown but "must own" company, yet never quite delivers. The answer, in my view, is at least partially due to PICO's inability to deliver consistent earnings. In fact, PICO has not had a positive bottom line on an annual basis since 2008. Confusing the issue is the fact that management does not measure success via earnings but rather growth in book value per share, which is a foreign method to many investors. Furthermore, book value has fallen four consecutive years, from $27.84 in 2009, to $19.98 at the end of last quarter, so the markets are discounting PICO until the company can show something positive.The canola business should ultimately deliver some stability to earnings, but until it is able to, investors may remain skeptical. PICO Chart PICO data by YCharts

And so it goes, the value investors great dilemma; a company with seemingly valuable assets that has difficulty delivering, and remains "misunderstood" eleven years after I took my first position.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

At the time of publication, Heller was long PICO.

Jonathan Heller, CFA, is president of KEJ Financial Advisors, his fee-only financial planning company. 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.