Cane versus commercial development
Cane versus commercial development: value in A&B farmlands
- 2004-02-18 - Pacific Business News (Honolulu)
LATEST NEWS
6:58 AM HST Wednesday
A mainland stock analysis firm says Alexander & Baldwin has only just begun to tap the value of its massive land holdings in Hawaii. But the glowing report is based on the assumption that its Maui canefields will inevitably be developed for more profitable uses.
The analysis came this week from the Motley Fool, whose name hints at the breezy, cut to the chase style of its reports. It said Tuesday that A&B stock is undervalued relative to future earnings because of its land holdings in Hawaii.
A&B carries $120 million in property, much of it undeveloped land on Maui and Kauai. "And what, you may ask, is the average carrying cost per acre for this undeveloped land? Would you guess $5,000? $10,000? The answer is $150. Don't blink, you read it correctly," Motley Fool said. "The company owns around 90,000 acres in Hawaii, with an average cost per acre less than the price of an expensive dinner for two."
The report said A&B's real estate division "has barely begun to unlock the value of its historic landholdings -- yet the segment is already highly profitable." A&B Properties made a $61 million last year, up 17 percent, on $144 million in revenue.
The mainland analyst did note that 30,000 of A&B's Hawaiian land holdings are zoned for watershed or conservation. "However," it said, "that still leaves more than 60,000 acres of mostly agricultural land worth substantially more than the stated cost."
A&B grows sugar cane on its central Maui farmlands, and coffee on its Kauai holdings.
- 2004-02-18 - Pacific Business News (Honolulu)
LATEST NEWS
6:58 AM HST Wednesday
A mainland stock analysis firm says Alexander & Baldwin has only just begun to tap the value of its massive land holdings in Hawaii. But the glowing report is based on the assumption that its Maui canefields will inevitably be developed for more profitable uses.
The analysis came this week from the Motley Fool, whose name hints at the breezy, cut to the chase style of its reports. It said Tuesday that A&B stock is undervalued relative to future earnings because of its land holdings in Hawaii.
A&B carries $120 million in property, much of it undeveloped land on Maui and Kauai. "And what, you may ask, is the average carrying cost per acre for this undeveloped land? Would you guess $5,000? $10,000? The answer is $150. Don't blink, you read it correctly," Motley Fool said. "The company owns around 90,000 acres in Hawaii, with an average cost per acre less than the price of an expensive dinner for two."
The report said A&B's real estate division "has barely begun to unlock the value of its historic landholdings -- yet the segment is already highly profitable." A&B Properties made a $61 million last year, up 17 percent, on $144 million in revenue.
The mainland analyst did note that 30,000 of A&B's Hawaiian land holdings are zoned for watershed or conservation. "However," it said, "that still leaves more than 60,000 acres of mostly agricultural land worth substantially more than the stated cost."
A&B grows sugar cane on its central Maui farmlands, and coffee on its Kauai holdings.
posted by DP at 8:03 PM
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