Shares of cotton and farming giant JG Boswell (BWEL.PK), owner of an estimated 142,000 California acres, and another 30,000 in Australia, are in positive territory year to date in 2009, up 14% excluding dividends. That's still down substantially from $1000 range the company briefly touched in May of 2008.

The appeal of Boswell is not in its farming operations, which although impressive in their own right, merely represent the current use of assets which might ultimately be much more valuable used for other purposes.

Perennial net/net Lazare Kaplan International (LKI), which we last profiled on July 8th, is currently in the throes of a trading halt on AMEX, as a result of its failure to file the company's 10K in a timely manner. In fact, no shares have exchanged hands since September 15th. On Thursday, LKI submitted a plan to NYSE AMEX outlining how it intends to regain compliance with exchange listing requirements.

This type of situation is rarely, if ever good news. Lazare did not file its 10K in order to resolve "a material uncertainty concerning the collectability and recovery of certain assets, and "the Company's potential obligations under certain lines of credit and a guaranty". While the Company believes it will file it's 10K by 12/15/2009, delisting is certainly a possibility. Lazare has also stated intentions to trade over-the-counter if the Exchange does not approve the plan.

We typically shy away from large, or even mid caps; the fact remains that they already get a great deal of coverage, and in our minds, they just aren't typically as interesting as the nano/micro cap markets.

That being said, over the past several months, we've been intrigued by some larger names that were all but written off for dead. Some appeared to be trading like cheap call options. Foremost on this list is publishing powerhouse Gannett (GCI), parent of the 2.1 million daily circulation USA Today.

Shares of this tiny furniture manufacturer, which we profiled in June, have risen nearly 80 percent in the past three months. Chromcraft (CRC) is a member of The Cheap Stocks 21 Net Net Index

As we indicated in our June piece, this is not a great business to be in. Net/Nets are typically somewhat ugly, a fact that is often reflected in the stock price. In Chromcraft's case, we saw some potentially interesting assets we believed were worth a great deal more than the sub $1 stock price.

If there's anything we like to cover besides net/nets here at Cheap Stocks, it's real estate, more specifically, companies that own relatively large amounts of raw land, commercial property, or a combination of the two. My portfolio is chock full of these companies, from retailers such as Cabela's, to restaurants (Cracker Barrell, Denny's) to shipping companies (Alexander and Baldwin) to agriculture (JG Boswell and Limoneira), to name just a few.

Over the years, I've also sold out of some names as well. Maui Land and Pineapple (MLP) is a great example. I continue to follow the company, however, looking for a re-entry point, or making a determination of whether I want to take a new position.

Without a doubt, the recent market "recovery" off March lows has had a dramatic effect in the land of misfit companies; more specifically, the number of net/nets is falling. This is not at all surprising; we've seen it happen several times before when markets recover.

There are still 140 or so net/nets with market caps greater than $5 million, but those at the upper end of the market cap spectrum are few and far between. Case and point, on February 19th, there were more than 320 such net/nets; 38 of which had market caps above $100 million. Currently, there are just 10 above $100 million.

Long-time readers may recall our many postings on diamond company Lazare Kaplan (LKI) throughout the years. A perennial net/net, its a company that we owned for a 2 year period until February 2008, when we sold out at around $10. Truth is, we made a little money (26%), but the story had gotten dull, and we were convinced that LKI was just one of those companies that would forever trade below net current asset value.

Interestingly enough, in October 2007, Lazare announced a bizarre 1 for 101 reverse stock split, followed by the buy out of any shareholders owning less than 1 post-split share, and then by an immediate 101 for 1 forward split. This was intended to reduce shareholder roles to save an estimated $25,000 per year in costs. At the time, we thought that the company was aiming to go dark. That has not happened.

Buying net/nets is sometimes an ugly business. It's often hard to justify sinking capital into a business that appears to be headed for the scrap heap. But part of being a net/net investor is knowing the risks inherent in buying companies that have probably already seen their best days, are thinly traded shadows of their former selves and are reduced merely to assets that you believe may be worth at least a few times the current price.

Chromcraft Revington (CRC) is a great example. A member of the 'Cheap Stocks 21 Net Net Index', the Indiana based furniture maker and distributor has seen sales fall for the past 6 consecutive years, from $214 million in 2002 to just $99 million in 2008, a 54% decrease. The company lost $26.5 million last year, or $5.79 per share. In the first quarter of 2009, sales dropped 39% from the same period last year, and the company lost another $3.2 million. Clearly, a bad situation made even worse by the economic environment of the past 18 months.

We are fortunate to meet a lot of interesting people in the investment business. Whether it's through the Value Investing Congress, Real Money.com (where I am a contributor), Seeking Alpha, fellow deep value bloggers, or Cheap Stock subscribers, there are a great deal of very smart deep value players out there.

We first met Art Patten, President of Symmetry Capital, through this website, and have had several meetings with him since then. His insights into the world of deep value micro-cap investing are very interesting, and his investment philosophy is complementary to what we espouse at Cheap Stocks,

William Waller & Jason Stock-M3 Funds
The U.S. Banking Sector: Chaos & Opportunity

M3 was founded in 2007, and invests (long and short) in small and mid cap names in the US bank and thrift sector. There are 1300 publicly traded banks, and 93% have market caps less than $500 million. Stock presented his view of the current state of the banking sector:

Zeke Ashton-Centaur Capital Partners
Surviving the Worst Case: Risk Management and Value Investing

A veteran of several Value Investing Congresses, Zeke Ashton provided useful insights into some of the pitfalls that befell value managers in 2008, and how to avoid them in the future.

Over the next couple of days, I'll be posting notes from the Value Investing Congress, which I attended last week in Pasadena.

Once again, this was a fantastic conference. I walked away from it with some very interesting investment ideas, as well as cautions about the days ahead. One of the greatest aspects of the VIC is the opportunity to meet other investors and portfolio managers, and to share ideas, perspectives and philosophies. Thanks to Congress founders John Schwartz and Whitney Tilson for once again putting on a first class event.

Shares of cotton and farming giant JG Boswell, owner of an estimated 142,000 California acres, and another 30,000 in Australia, have been hit hard this year, just like most other companies. Shares can now had for $435, (if you can get them that is; average daily volume is just 322), nearly 60% below the 52 week high of $1000.

The appeal of Boswell (BWEL) is not in its farming operations, which although impressive in their own right, merely represent the current use of assets which might ultimately be much more valuable used for other purposes.

As the market doldrums continue, hope springs eternal that we will hit a bottom. But, when? Investors continue to receive their daily doses of bad news, continue to see their portfolio balances diminish, and continue to lose hope; all of which is a self fulfilling prophecy of sorts, driving the markets even lower.

The new administration is not helping matters. The hope and optimism we were bombarded with during the campaign has given way to fear, uncertainty, dire predictions if certain legislation is not passed, and an almost complete lack of confidence among consumers and investors alike. There has been no bounce; the S&P 500 is down 30% since election day, and 12% since inauguration day. With all the big spending plans, Mr. Market is signaling fear that the new agenda will not have a positive outcome. Without confidence, without hope that the recession will end and that there are better days ahead, we'll continue to be whipsawed.

Last year at this time, we rolled out what we believed to be the first index comprised of companies trading below their net current asset value. It was an experiment to test the notion that "passive" management of net/nets could generate above-market returns.

The CS21 Net/Net Index was down about 36% in its first year, versus -40% for the Russell Microcap Index. Hardly proves our theory about the relevance of applying a scatter gun approach to net/net investing, but we'll continue to let this index run as is rather than rebalancing, in order to judge the results over a longer time horizon.

It's hard to believe that our index of net/nets is nearly one year old. When we introduced the index in February of 2008, we did so as an experiment. What was designed as a naively constructed cap-weighted index, CS21 has had an interesting ride.

Since inception (February 12th 2008) the CS21 Net Net Index is down 25.3%, versus -35% for the Russell Microcap Index, the closest benchmark that we can find.

Mark Sellers, Managing Member of Sellers Capital, LLC, which owns 16.3% of Premier Exhibitions (PRXI), recently sent a letter to current shareholders, seeking support for a slate of four independent directors to fill vacancies on Premier's board.

Sellers, who currently serves on the board, believes that the company is not maximizing shareholder value, and squandering both capital and opportunity. Many shareholders, including yours truly, don't disagree.

We continue with Part II of our 2008 Land Review (see part I here). These are the same companies we featured in last year's column, and not surprisingly, most are down significantly.

(Market Cap and EV are in $ millions.)

Last year at this time, we ended 2007 with a review of some of the companies holding one of our favorite assets, land (see part 1 here and part II here). I thought last year was difficult, but it pales in comparison with the drubbing that these companies suffered during 2008. Some are down more than 70%, and ultimately, this could be an interesting turn-around story.

One data calculation we use is worthy of explanation:

PICO (PICO) reported Q3 revenue of $9.1 million, nearly double same quarter last year, and net income of $533K, up 12%. The bulk of Q3 revenue was from a gain on the sale of the company's remaining interest in 30,000 acre feet of water storage capacity, which it sold for $11.7 million.

The company completed the Fish Springs Ranch pipeline project in July, and now has 8000 acre feet of water for sale. PICO also sold its first acre foot (one water credit) of Fish Springs water for $45,750. Although this project offers the only new source of water available to developers in the Reno area, the struggling Nevada real estate market has slowed PICO's progress.