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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: James Clarke who wrote (9718)	1/23/2000 9:14:00 PM
From: Marc Fortier	Read Replies (1) \| Respond to of 78744

I would like to share with the participants of this board an interesting opportunity I came up with while browsing today. I found it by reading a story written last week in the USA Today. Here is the link: usatoday.com Florida East Coast a hidden treasure? was titled the article. Well, IMO FLA may well be a treasure, but the reporter omitted to talk about a more compelling value: St. Joe Co. (JOE). Besides holding sizeable acres (1,1 million to be more specific) of lands throughout Florida, JOE controls 54% of FLA and has already announces the spin-off of all its shares to shareholders. This means that sooner or later, JOE will send to shareholders of record .225 shares of FLA for each share of JOE. In other words, if you hold 100 shares of JOE you will end up with 22.5 shares of FLA. At current market price, these new shares would be worth $1091,25. One hundred shares of JOE are worth close to $2500 right now, which would mean that you have JOE's remaining holdings for $14.20 per share. If you consider that JOE is repurchasing shares aggressively, and that there is over $3 net of cash per share, this would make it a very cheap stock to own in itself. What's more is that JOE's management is devoted to unlock hidden value. And so far, it has delivered, even though the market has not taken notice yet. You'll notice that insiders control 61% of this company. Not surprisingly, in the last months they have been active buyers of the stock at prices above or very close to the current price. Based on trailing earnings, FLA's added about 24 cents to JOE's bottom line of $1.25. If you still apply a p/e of 18 to JOE post spin-off, this would give us a price of $18 based on trailing earning. Don't forget that you would still have your shares of FLA. Considering that FLA is investing in the telecom industry, I think that these shares still have some upside built-in -- besides valuable holdings which make it a very profitable outfit already. Well, this a quickly written resum‚ of my findings. I'd like very much to hear from you guys about your opinion. Regards, MF P.S.: I don't hold a position on JOE or FLA, but I am very tempted to make a move as soon as tomorrow morning.