About Us - Stocks We've Liked
[Updated 6/30/2005]
Panhandle Cooperative Royalty (PHX, 28 ) I came across this one reading the fine print in Moody`s, the way that Benjamin Graham used to do. This is a nice little company (2.1 million shares outstanding, currently trades at about 28; formerly traded only by appointment). They own mineral rights mainly in Oklahoma but also in surrounding states. Most of these minerals were contributed by farmers in the 1920s; thus they are on the balance sheet at little or nothing. Before 1972 the CEO didn`t receive a salary. They got a new CEO about 8 years ago, Mr. Peace, who came from Unocal. Under his tutelage Panhandle has more actively participated on wells that were drilled by others on their mineral rights. However, Panhandle is not an E&P company. We acquired PHX - (then it was PANRA) for a few portfolios generally between $3-6/share split adjusted, and a few higher. They have some production mainly in Oklahoma and New Mexico. At $9/share, we thought their non-producing mineral rights and present value of current production were worth more per share than the company was selling for.
However, there is, as they sublimely express it in this business, a "kicker." They own over 10,000 net mineral acres in Pushmataha County, Oklahoma. This area is sort of associated with the Ouchita Overthrust. There is a book written by a Dr. Fay, published (I think by Eastern New Mexico University Press) on the geology of Southeastern Oklahoma. In it, Professor Fay wrote that this area may hold more petroleum reserves "than all of Saudi Arabia."
My Dad was in the oil business for 42 years. He often told us that if you put a geologist on any granite boulder in the High Sierras, after about a week the geologist would be fairly certain that there was oil in that granite boulder. So we`ll see. If their Pushmataha minerals are productive, the deeper regions of Pushmataha County are more likely to hold gas than oil, and currently gas is viewed more favorably by the financial markets.
Griffin Land and Nursueries (GRIF, 24) A spin-off from Culbro (General Cigar), and hence perhaps tainted by the sweet whiff of tobacco, the hearty relaxing aroma of fresh cigar smoke. Book value is about $19/share, and the Company states in their 10-K that accounting book value understates current market value of the company assets, since their real estate was acquired at cheaper prices earlier this century. They also own small interest in a British company. Some people might think this is a garden and nursery company, or a real estate company, but we think its an estate tax planning vehicle. Never likely to be timely, but probably will do well over the next 10 years if management doesn`t screw it up. They own a couple of hundred acres near the airport in Hartford, Connecticut. Also tends to trade by appointment.
St. Joe (JOE, 81) St. Joe owns a piece of Florida, only a few percent. They also own some shares of Florida East Coast Railway (FEC) that they may spinoff to shareholders. I once phoned them up and asked how much is an acre of Florida worth. They told me they had no idea, and that it was hard to say. Clearly, they`re not Yankees. The current CEO came from Disney.
Disclaimer and disclosure: The above is not intended as a recommendation. We hold shares of the above in portfolios that we manage, and also in personal or related accounts.