The St. Joe Company (JOE), mcap=$2.6bn, price $44.16 vs $35.00

JOE pitch:
– Real estate developer that owns ~170k acres of coastal land in Northwest Florida, mostly Walton/Bay counties.
– A very good and detailed write-up of the investment opportunity.
– The company is actively developing residential communities and is shifting focus to recurring revenue streams.
– Income to be generated from the ongoing developments in 3% of JOE’s land in Walton/Bay counties accounts for the majority of its market cap today, meaning investors pay very little for the remaining 97% of the land with entitlements for commercial, residential, and hotel rooms.
– JOE’s is not a temporary covid beneficiary – JOE’s business inflection has been a decade in the making and covid just provided an acceleration of already occurring themes.
– If the Bay/Walton region continues to grow, the commercial & hospitality segments alone will make up more than the entire market cap within ~5 years and will still have decades’ worth of growth left.

JOE valuation:
– Projects on only 3% of JOE’s land in Walton/Bay counties are set to generate EBIT of $117-175m by 2024 and on a SOTP basis would be valued at $1,470-2,270m.
– This compares to the $2.5bn market cap today.

Exp. gain: Not specified.

Full write-up (free guest account required):