JOE - ST. JOE CO

[Gregmal]

Ive liked/followed/owned/mostly traded JOE forever(although not currently holding any). Its certainly a unique company with rocketfuel potential. However I dont think that on a fundamental basis the change in the share price over the past couple months equates to the changes at the company level. They've done everything right for the past half decade. Slowly fortifying the balance sheet. Buying back tons of stock AHEAD of the big catalysts. JVs. But at the end of the day, we've all seen these. Even the best ones take time for the buildout and while there's shovels in the ground, theres always constraints on that end too, even from a permitting and labor perspective as well. So part of this is likely all that execution being rewarded, but I think its safe to say that of lot of it is also just the market doing what its been doing to a lot of stocks. Nothing wrong with that of course. But also important to keep in perspective. Their land will undoubtedly benefit from migration south. But its not as simple as x acres times $25k an acre. The income properties, lets face it, are not exactly investment grade, top tier, long term net lease stuff. But they'll suffice in terms of providing the company cashflow. So all in all I think you've got the right approach.

 

If I had to wager theres still probably more Kerrisdale related shorts in this than Einhorn followers. As I said at the time, what a stupid short.

[DooDiligence]

NWFL anecdotal info.

 

My little corner of NWFL is seeing a housing development spurt.

 

I've seen quite a few desirable properties around me (large, mutli site / condo potential) which have been bought over the years & then sat & languished. Over the past year, nearly all of them are either completed or under construction now.

 

One large development along the bayou, just down the street, touts 2200 sq ft, split level homes, starting at $440K, of which about a dozen are under construction now. They're all squeezed right next to each other on postage stamp sized lots. Maybe a dozen of these homes will front the bayou and have views but they'll have no water use other than shared walk overs to docks (wetlands / marsh areas are not allowed to be disturbed). The remaining 30ish homes (I forget the actual numbers but this is close), will have no view of the water at all, but will have access via the shared walks.

 

Another large lot at the end of my street was developed by the same entity and subdivided into 6 lots. Services are in but no homes have been constructed and probably won't be until someone(s) stupid enough buys the lots. The lot is peninsular with the bayou on one side & canals on the other two sides. They flood when the weather person even utters the word rain.

 

Another large lot, near the boat launch, had a developer (years ago) try to pre-sell "to be built" condos but they never got any traction. The lot was sold and turned into a park in a cooperative project by Escambia County, the Trust for Public Land and the Florida Department of Environmental Protection. Oil spill funds from the Deepwater Horizon oil spill were used to fund the project. The same funds were used for the Galvez landing boat launch, next door to the park. Hurricane Sally destroyed the beautiful fishing pier on the park & although debris has been partially cleared, there's no sign of repair work yet. The dock at the boat launch next door was repaired "tout suite".

 

I've long thought that this area was undervalued when compared to the crazy valuations in other coastal Florida area. Low cost of living, reasonable property taxes, great location (hurricanes be damned).

 

I'm not particularly interested in selling, but if things got crazy, I do have a magic number that would make me move.

 

I view all of this as a positive for the NWFL area and regret not having bought into JOE years ago after having looked hard at it.

[Guest cherzeca]

I have owned FAIRX for a long time and will likely in the future. one reason is that I have a hard time trusting myself on individual stocks (unless I do a lot of DD and there is a legal angle), but an easier time trusting someone like Berkowitz.  (I trust no-one on the sell side). you have to give him credit here, he engaged as per usual in "premature accumulation", but he is proving to be not only a very savvy stock picker but also a good board chairman.  lots of runway left in JOE, seems to me, and I have this in my check every once in awhile pile.   

[thepupil]

I have owned FAIRX for a long time and will likely in the future. one reason is that I have a hard time trusting myself on individual stocks (unless I do a lot of DD and there is a legal angle), but an easier time trusting someone like Berkowitz.  (I trust no-one on the sell side). you have to give him credit here, he engaged as per usual in "premature accumulation", but he is proving to be not only a very savvy stock picker but also a good board chairman.  lots of runway left in JOE, seems to me, and I have this in my check very once in awhile pile. 

 

curious if your thoughts would change if JOE ended 2021 at $20-$25.

 

I think this run is pretty speculative and not sustainable and don't think JOE is worth $2.7 billion and I wouldn't be surprised at all if JOE continues to sell a bunch of lots, make progress on its projects and the stock cuts in half as the air comes out. it also wouldn't shock me if they report banger earnings in February and this randomly goes up 20,30,50% in a day, because its the real estate equivalent of the momo stuff.

 

i think kuppy knows this. he's playing a cynical game (not unlike his crypto bets) with CryptJOE; and i decided to play as well because it's easier for me to understand JOE than SNOW for example, and the float/ownership dynamics are favorable w/ pot committed guy hodl'ing 45% of the stock, a good bit of shorts, and an army of retail betting on sunshine.

 

i mean, if anyone wants to make a case for this being undervalued from like an actual fundamental investor's point of view, I'm all ears. It is after all, quite randomly my largest position (in terms of delta).

[Guest cherzeca]

"curious if your thoughts would change if JOE ended 2021 at $20-$25."

 

my thoughts are always changing on any stock...which is one reason why I invest for the most part in cash, indexes, smart jockeys and that very unusual situation where I want to make an individual stock bet.

[thepupil]

Was referring to your thoughts about berkowitz...sorry if that wasn’t clear, long winded way of saying I don’t think JOE 2020 absolves him of his general decade long shittiness, but for both my and his benefit I hope it keeps going up so Berkowitz can build the sand crawler.

 

https://www.thenextmiami.com/megamind-of-miami-to-build-intimidating-looking-headquarters-on-biscayne-boulevard/

 

Or at least the new contemporary museum, but I really want berkowitz to be managing $10B from the sand crawler.

 

https://www.thenextmiami.com/fairholme-museum-in-edgewater-is-getting-closer-to-breaking-ground-after-signing-utilities-deal/

 

 

[Gregmal]

Maybe its just me, but the 2020 sketch seems to reflect the hardships that occurred during the 6-7 year stretch between the 2014 sketches.

[Pelagic]

A friend has been working on this development for the past few weeks. Not a JOE property but in the neighborhood so to speak. I was shocked at the prices they want, most aren't even directly on the beach.

 

https://alysbeach.com/real-estate/

 

 

[Guest cherzeca]

@pupil

 

Berkowitz is a big thinking contrarian. my kind of guy.

[mateo999]

any news today driving this sharply lower?  Did FL just institute state level income taxes?

[Gregmal]

Gravity. Momo all around taking a bath today.

[BG2008]

any news today driving this sharply lower?  Did FL just institute state level income taxes?

 

The bears that raided GRIF is now raiding Joe

[thepupil]

I see no news; there’s a fluff piece in Bloomberg about berkowitz decade long bet finally working out.

 

It transformed from sleepy JOE to CryptJOE so makes sense to have random up and down moves.

 

There was no real reason for the move up other than a little kuppy pump, so maybe a little dump happeni now.

[Saluki]

Maybe people heard I was long the stock and it tanked? 

 

I think it's run a little ahead of itself in terms price (based on earnings, not based on the value of the dirt they own), but rich people living away from cities during a pandemic could give it a nice tailwind for a while.

[thepupil]

In April 2020, there were 6.7mm shares of JOE sold short, the price was in the high teens.

 

In January 2021, there are 1.6mm shares of JOE sold short, JOE hit $50 today, the highest price since 2007.

 

most of the short covering has occurred in the past 3 months.

 

one should have tempered expectations of JOE without the tailwind of short covering IMO. Tempted to totally exit, but just letting a much reduced portion of the position run.

 

 

[adesigar]

In April 2020, there were 6.7mm shares of JOE sold short, the price was in the high teens.

 

In January 2021, there are 1.6mm shares of JOE sold short, JOE hit $50 today, the highest price since 2007.

 

most of the short covering has occurred in the past 3 months.

 

one should have tempered expectations of JOE without the tailwind of short covering IMO. Tempted to totally exit, but just letting a much reduced portion of the position run.

 

I hold JOE through FAIRX. I hope Bruce Berkowitz is selling or hedging some JOE in FAIRX.

[thepupil]

Doubtful, from his letter today.

 

I think selling would be a bad move given how much stock he owns, better to try to get some inflows into the mutual fund and dilute the stake down( though that’s a tall order)

 

St. Joe’s common stock price increased last year by 120%. The company is uniquely positioned for decades of profitable growth along Northwest Florida’s Emerald Coast. Residential, commercial, and hospitality segments are breaking records. Pricing is robust. Homes sell before completion. Apartments are fully occupied. Clubs by JOE expands. Hotels are in construction at Seagrove Beach, Camp Creek, Beaches International Airport, Pier Park, Panama City Beach’s Sports Complex, and Panama City’s downtown marina. The Powder Room, Watercrest, and Watersound Insurance opened for business. Latitude Margaritaville Watersound will soon open. Tyndall AFB’s multi-billion dollar expansion will require thousands of additional homes. St. Joe is only scratching the surface.

Homes on Florida’s Emerald Coast, South of SR 98, sell for at least $1,000,000 – and multiples more. North of the highway, at Watersound Origins, homes price about $630,000. East, at Breakfast Point, homes average around $400,000. North of the intra-costal waterway, Latitude prices start about $250,000. Commercial acreage fronting the highway sells for $200,000 and exceeds $500,000. St. Joe’s entitled lands in Walton, Bay, and Gulf Counties may be worth exponentially more than implied by the company’s market value

[Jurgis]

St. Joe’s entitled lands in Walton, Bay, and Gulf Counties may be worth exponentially more than implied by the company’s market value

 

I only exponentially invest with money managers who exponentially expound the exponent of my capital.

[Saluki]

In April 2020, there were 6.7mm shares of JOE sold short, the price was in the high teens.

 

In January 2021, there are 1.6mm shares of JOE sold short, JOE hit $50 today, the highest price since 2007.

 

most of the short covering has occurred in the past 3 months.

 

one should have tempered expectations of JOE without the tailwind of short covering IMO. Tempted to totally exit, but just letting a much reduced portion of the position run.

 

I hate paying taxes but I own this in my regular account and my retirement account and I'm tempted to sell it in my retirement account. Problem is that last year I sold about half and thought I would just buy it back later (because it's been trading sideways for years) and then it began it's run. I ended up buying most of it back at higher prices and still ended up with more than a double, but if just sat on my hands and did nothing it would've been soooo much better.  Besides JOE doing really well, the stuff I replaced it with, which I loved at the time, feels like the kind of love you hear about in country music songs.

[BG2008]

In April 2020, there were 6.7mm shares of JOE sold short, the price was in the high teens.

 

In January 2021, there are 1.6mm shares of JOE sold short, JOE hit $50 today, the highest price since 2007.

 

most of the short covering has occurred in the past 3 months.

 

one should have tempered expectations of JOE without the tailwind of short covering IMO. Tempted to totally exit, but just letting a much reduced portion of the position run.

 

I hate paying taxes but I own this in my regular account and my retirement account and I'm tempted to sell it in my retirement account. Problem is that last year I sold about half and thought I would just buy it back later (because it's been trading sideways for years) and then it began it's run. I ended up buying most of it back at higher prices and still ended up with more than a double, but if just sat on my hands and did nothing it would've been soooo much better.  Besides JOE doing really well, the stuff I replaced it with, which I loved at the time, feels like the kind of love you hear about in country music songs.

 

What a sentence!

[undervalued]

Wait, is Berkowitz smart again?

[Greg]

Maybe Borowitz will be the Domestic Equity Fund Manager of the Current Decade

[thepupil]

 

 

curious if your thoughts would change if JOE ended 2021 at $20-$25.

 

I think this run is pretty speculative and not sustainable and don't think JOE is worth $2.7 billion and I wouldn't be surprised at all if JOE continues to sell a bunch of lots, make progress on its projects and the stock cuts in half as the air comes out. it also wouldn't shock me if they report banger earnings in February and this randomly goes up 20,30,50% in a day, because its the real estate equivalent of the momo stuff.

 

i think kuppy knows this. he's playing a cynical game (not unlike his crypto bets) with CryptJOE; and i decided to play as well because it's easier for me to understand JOE than SNOW for example, and the float/ownership dynamics are favorable w/ pot committed guy hodl'ing 45% of the stock, a good bit of shorts, and an army of retail betting on sunshine.

 

i mean, if anyone wants to make a case for this being undervalued from like an actual fundamental investor's point of view, I'm all ears. It is after all, quite randomly my largest position (in terms of delta).

 

JOE +15% / $59 after hours on banger earnings

[Saluki]

It started coming down and I was hoping I'd get some more bites at the apple in the $40s, but it looks like it's gonna keep running. 

 

I'm still holding but I'm not adding at these prices.  I think HHC, which has doubled off it's pandemic low looks okay vs JOE that has almost quadrupled. But I think this still has room to grow since those land sales make the commercial stuff that JOE has in development become more valuable.

[thepupil]

as of today, I sold my last options and initiated a high cost basis #neversell small 1% tracking / regret minimization position in the common.

 

I started out risking 100  bps if JOE went to $0 (sold $25 puts, used proceeds to buy 3x $35 calls), then kept rolling profits to $35 calls, then $40 calls then $45 calls. as the position became uncomfortable large, I trimmed.

 

all in I added about 600-700 bps to my portfolio since October 2020 from JOE options, my peak cost at risk was never more than 200 bps (using house money fallacy, never more than 100 bps). Had I just held and never de-risked after the $45's I would have added about 1500 bps (maybe more) to the portfolio. I'm okay with that. this asset is very difficult to price. can't get everything right.