Shares of cotton and farming giant JG Boswell (OTCPK:BWEL), owner of an estimated 142,000 California acres, and another 30,000 in Australia, soared $73 today to an all-time high of $900 on volume of 251, and you guessed it, no news. We’ve owned BWEL shares for years, have reported on it several times in the past, but the company still remains somewhat of a mystery.
Certainly, the appeal of this company is not in its farming operation, which although impressive in its own right, merely represent the current use of assets which might ultimately be much more valuable used for other purposes. The company continues to develop its Yokohl Ranch project, a master planned community in Tulare County California, but the real gem may lie beneath the land: massive amounts of water that may be worth several billions. "May" being the operative word.
We were fortunate to obtain a copy of the company’s 2006 annual report, which we are embarrassed to admit is the first one we’ve ever seen. (We have seen financial statements from the $325/share company tender offer documents circa 2002-2003)
Here are the Highlights for the year ended June 2006:
Dvd Yield: 1.56% Revenue: $386.58 million Net Income: $19.744 million Diluted EPS/shr: $20.41 Current Assets: $196.741 million Cash: $5.475 million Total Assets: $616.957 million Current Liab: $138.637 million Short Term Debt: $80.8 million Long Term Debt: $0 Stockholders Equity: $430.209 million Shares Out: 956,759 Book Value Per share: $449.55 Market Cap: $861 million Enterprise Value: $936 million Enterprise Value/California Acre: $6591
Based on just the California land, we estimate Enterprise Value/Acre to be less than $6600, and that ignores any value in the Australian land. We hope to obtain a 2007 annual report, when available.
*The author has a position in JG Boswell.