We originally took a position in MLP because of its land holdings (28,000+ acres) in Hawaii. We were not crazy about their low margin pineapple business, but to us, that’s a freebie.
Resort Segment: Kapalua Land Company
Nine Miles of Hawaii Beachfront
Part of Maui Land’s 28,200 acres include 22,800 in West Maui, including Kapalua Resort a golf community, which borders the ocean, and boasts 3 beaches, 2 hotels, 3 championship golf courses, 10 restaurants, and 700+ single family homes and condominiums. Oh, did I mention the 9 miles of beachfront property?
Approval for Expansion
The big news for MLP was the recent decision by the Maui Planning Commission which approved Maui Land's plans to build multi-million dollar homes and a new private golf course at the Kapalua Resort. This potentially opens the door for the company to finally unlock shareholder value.
At it's current enterprise value of $263 million, that MLP's land is valued at about $9,300 per acre, on an Enterprise Value/Acre basis, a calculation we are fond of here at Cheap Stocks. Granted, some of the land is preserved, and land utilized in the pineapple operation (6,000 acres) is not nearly as valuable as the Kapalua Resort property. But, a compelling calculation nonetheless.
MLP 1-yr chart:
Disclosure: the author has a position in this stock.