This morning I am just taking a walk through the markets kicking tires and turning over rocks in the constant search for opportunities. Rather than bore you with more data from the Fed (as important as that is in the weird world in which we are living) or discussions of conditions in the banking industry right now, I thought I would just share a few ideas I have been tracking that are probably worth accumulating no matter what the markets do over the rest of the year.
Alico (ALCO) owns something that is in very high demand right now. They have about 100,000 acres of land, mostly right here in Southwest Florida. Almost half of the properties are used for citrus crops, the biggest being oranges. Most of the crop is sold to Tropicana for the not from concentrate fresh juice market.
They also own over 50,000 acres of land that they lease for cattle grazing, recreational hunting, farming lease, mining, and conservation. They have been steadily selling parcels to the state government for conservation purposes. So far, Florida has bought 22,000 acres from Alico.
All told, Alico has sold more than $86 worth of land over the last 3 years.
They have been using that cash, along with cash generated from the citrus business, to increase the dividend, buyback stock, and reduce debt.
They have also been buying more orange groves as they recently bought 3,300 additional contiguous orange grove acres. They have just resigned a long-term deal with Tropicana, so the orange juice business should continue to produce cash for years.
This is not a flashy get-rich overnight stock. Alico is going to continue selling land for conservation, and I suspect that at some point, the prices will be too attractive not to start selling for development. That ...
