Cheap Florida land play

Major public company landholder undervalued?

Where can you buy land in Florida at $5,400 and acre? A good place to start would be investing in shares of the St. Joe Co.

Even if St. Joe weren’t such a creative developer, the company’s $60 stock price (as of Sept. 28) would still be something of a head-scratcher. With St. Joe’s total stock market capitalization now standing at $4.6 billion, Wall Street is valuing the company at the equivalent of roughly $5,400 an acre—about a week’s rent for an upscale Florida condominium.

That’s even cheaper than it sounds. St. Joe right now has 19 active developments spanning about 13,000 acres. Recent sales range from a $2.9 million beachfront condominium at WaterSound Beach in Santa Rosa Beach, Fla., to a $130,000 lot in a Tallahassee subdivision called Southwood. (Ball would not be amused: Southwood used to be his personal estate.) In the second quarter of 2005, St. Joe recorded an average profit on all home and home-site sales equivalent to $160,000 an acre. St. Joe won’t make that much on all its sales, but even now, the company is selling remote unimproved ranch land for upwards of $7,000 an acre. And that’s before the population boom that everyone knows is coming.

Buy Florida Land Cheap! [Fortune]

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