We are upgrading our recommendation on St. Joe to Outperform from
Neutral. The company reported better-than-expected results in
fourth-quarter 2013 thanks to a notable rise in revenues. Recently,
the company reaped $562 million (including $200 million as a timber
note) by selling around 380,000 acres of its non-strategic
timberland and rural land in Northwest Florida to AgReserves Inc.'s
subsidiaries. The move is a strategic fit for St. Joe and provides
the company substantial liquidity, which it can deploy for
development needs. St. Joe is currently focused on enhancing resort
operations, development of the port at Port St. Joe as well as the
active adult residential market, which would help it ride on the
growth trajectory going forward.
Incorporated in 1936 and currently based in WaterSound, FL, The
St. Joe Company is engaged in real estate development and sales and
has notable interests in the timber industry. The company owned
approximately 567,000 acres of land (as of Dec 31, 2013) timber and
resort, leisure and leasing assets concentrated mainly between
Tallahassee and Destin, FL.
St. Joe reports its business activities under 5 operating
segments 1) residential real estate, 2) commercial real estate, 3)
rural land, 4) resorts, leisure and leasing operations and 5)
forestry. The Residential Real Estate segment plans and develops
mixed-use resort, primary and seasonal residential communities of
various sizes, mainly on its existing land. The Commercial Real
Estate segment develops and sells real estate for commercial
purposes and provides development opportunities for national and
regional retailers as well as for multi-family rental projects. The
Rural land segment markets and sells tracts of land of varying
sizes for rural recreational, conservation and timberland uses.
The Resorts, leisure and leasing operations segment generates
revenues from its recurring revenue streams. These mainly include
the WaterColor Inn and vacation rentals, golf courses, marinas and
leasing operations. At times, the company also generates revenues
from the sale of operating assets. The Forestry segment manages and
harvests extensive timber holdings. The segment generates revenues
from the sale of wood fiber, saw timber, standing timber as well as
forest products and conservation land management services.
By segment, St. Joe's 2013 operating revenues are given
The St. Joe Company (JOE): Read the Full Research
ST JOE CO (JOE): Free Stock Analysis Report
To read this article on Zacks.com click here.