Some stocks demand a little more of their owners, and PICO Holdings (PICO)
is one of them. PICO is essentially a holding company where management
seeks out undervalued assets, buys them (whole in or in part), and looks
to build shareholder value by harvesting cash flow from those assets
and/or selling them at a later date.
What makes PICO more
challenging than the average stock is that there virtually no analyst
coverage and the company's three very different primary businesses
(water development, real estate, and oilseed crushing) are not the
easiest to value. Although the company's per-share book value
performance hasn't been all that impressive in recent years, valuing
this stock solely on book value can be a little misleading. Likewise,
this company and stock should be leveraged to improving real estate
markets in the western U.S., and trailing book value can understate that
value.
Read more here:
PICO Requires Patience, But Should Pay
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