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

To: Wallace Rivers who wrote (4591)	8/4/1998 1:22:00 PM
From: Wright Sullivan	Read Replies (1) \| Respond to of 78704

Wallace, my take on Ledsinger leaving The St. Joe Company (JOE) is that this is good news and not bad news. I think Rummell hired Ledsinger as a counterweight to Rummell's dynamic personality, but I don't think he was all that great for the company. I do not see any other evidence of turmoil at JOE, or any indication that their direction has shifted. I plan to purchase additional JOE. If shares actually crack 20, it would be an opportunity to purchase JOE for about the same price as when Rummell first came aboard. JOE is clearly a far stronger company today than it was before Rummell, in my opinion. It would be interesting to hear James' and Mike's view on JOE's current valuation. They each posted very thorough analyses back when it was a clear value stock. Later, as it rose to the mid-30's, James' wise counsel was that JOE's price had risen rapidly, and the case for it as a value play was becoming questionable. (I hope I am recalling this correctly). It is also interesting to note that Florida East Coast Industries (FLA), the railway 54% owned by JOE, has held it's own over recent months, while JOE's share price has dropped sharply. Some of this may be because FLA is a more straightforward business, whereas with JOE, much of the gains are well out in the future. FLA also happens to be installing fiber-optic cable/conduit along their railroad right-of-way from Jacksonville to Miami, and has retained some rights to the customer connections at the end of these cables, as I understand it. While this begs the obvious joke about FLA being an internet stock, it may have a significant impact in their future earnings. And what is good for FLA is good for JOE. Much of the buzz generated by JOE's pricey secondary offering a few months ago has worn off, and people of may be dumping it in favor of shorter term investments. The big payoff from JOE will likely be several years in the future, as their huge coastal Florida land holdings are developed. But it's hard to know how fast they will develop momentum. Many of their current ventures offer quicker payoff and appear to move that time frame forward. And they are sitting on quite a pile of cash, recently made larger by the government purchases of their sugar lands. In summary, JOE remains a very long-term investment, and the price is dropping back to value levels.