5-Star Stocks Poised to Pop: PICO

By Brian D. Pacampara | More Articles
February 1, 2010 | Comments (2)

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Based on the aggregated intelligence of 145,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, diversified holdings company PICO Holdings (Nasdaq: PICO ) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at PICO's business and see what CAPS investors are saying about the stock right now.

PICO facts

Headquarters (Founded)	La Jolla, Calif. (1981)
Market Cap	$709.3 million
Industry	Multi-sector holdings
Trailing-12-Month Revenue	($8.24 million)
Management	CEO John Hart (since 1996) CFO Maxim Webb (since 2001)
Business Segments	Water resource and storage, real estate, runoff insurance, corporate
Compound Annual Tangible Book Value Growth (Over Past 5 Years)	36.8%
Cash/Debt	$160.6 million / $38.7 million
Other Highly Rated Holding Companies	Berkshire Hathaway (NYSE: BRK-A ) (NYSE: BRK-B ) Leucadia (NYSE: LUK )
CAPS Members Bullish on PICO Also Bullish on	Johnson & Johnson (NYSE: JNJ ) Vale (NYSE: VALE )
CAPS Members Bearish on PICO Also Bearish on	Bank of America (NYSE: BAC )

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 95% of the 306 members who have rated PICO believe the stock will outperform the S&P 500 going forward. These bulls include elrap and WhiskeyGirl.

Just last month, elrap tapped the stock as a cheap way to quench your thirst:

water is underrated. water shares are undervalued. It's only a matter of time before water is properly valued.

In an earlier pitch, WhiskeyGirl expands on PICO as a perfect pick for liquid portfolios:

Water. In [Nevada] and [Arizona], where its most prized. Additionally they've been trying to make inroads into [California]. I also appreciate the security and diversification that their insurance businesses bring to the stock.

The focus on increasing book value per share appeals to me and is backed up by their linking of it to exec compensation. I've read some of the other Fools and the articles drawing a comparison to early Buffett style management. Sometimes, its nice to hope that maybe, just maybe, that comparison will win out over the long term.

What do you think about PICO, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Berkshire Hathaway and Leucadia are Motley Fool Stock Advisor picks. Berkshire is also a choice of Inside Value, and the Fool owns shares of it. Johnson & Johnson is a selection of Income Investor. The Fool's disclosure policy always gets a perfect score.

Read/Post Comments (2) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.

Report this Comment On February 01, 2010, at 10:22 PM, footchester wrote:

I'm a huge fan of PICO and got lucky and got in during the 'once in a lifetime' sale on stocks in early '09. But I just can't bring myself to dump too much money into a stock that has announced that they won't be paying dividends at any time in the forseeable future. I believe that stocks like PICO will continue to grow until somebody figures out how to live without land or water. The first rule of 'buy and hold' is that you don't sell stocks that are doing well; but if there are no dividends, that investing model just doesn't work - especially if you need cash to pay bills.
Report this Comment On February 01, 2010, at 10:30 PM, footchester wrote:

bought it, love it, but won't invest much more unless they change their 'no dividends in forseeable future' plan. This is a 'long term' type of stock and nobody gets 'free cash' - if a company wants lots of eager share buyers, pay them to keep investing (with dividends)
Its not like PICO has to build factories or employ thousands of workers; they buy land and put the deed in a box; waiting for the day that the land is highly desirable for residential development, or when the water rights are worth more than gold. Nice plan, but I want to be paid to wait.

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