Based on the aggregated intelligence of 130,000-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

$518.29 million


Multisector holdings

Trailing-12-Month Revenue

$51.64 million


President/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 last five years)


CAPS members bullish on PICO also bullish on

General Electric (NYSE:GE)
Chesapeake Energy (NYSE:CHK)
Johnson & Johnson (NYSE:JNJ)

CAPS members bearish on PICO also bearish on

First Solar (NASDAQ:FSLR)
Harley-Davidson (NYSE:HOG)

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

Over on CAPS, fully 265 of the 278 members who have rated PICO -- some 95% -- believe the stock will outperform the S&P 500 going forward. These bulls include cmoney85 and All-Star 00YETI, who is ranked in the top 4% of our community.

Last month, cmoney85 picked PICO as a way to get some water in your system: 

Only a little debt, trading at or around book value with strong assets, I think this is a safe bet. Plus they sell water, I don't care how bad things get, people will always buy water.

In a pitch from October, 00YETI follows that line of thinking:

This company reminds me of Berkshire Hathaway [ (NYSE:BRK-A)] with the way it is run. PICO has invested heavily in water (seems like a strange "commodity", I know) around the SouthWest region of the states, such as Nevada. Water is already becoming scarce there, and it is projected to get much worse as demand rises (from people moving there to retire, etc). PICO owns hundreds of thousands of acres of land, and they sell water rights on that land. The potential returns that PICO can pull in is huge.

Ah, yet another diversified small-cap being compared to an early Berkshire. Of course, when your stated objective is to "acquire assets and businesses that [are] significantly undervalued and are unique or strategic," you're certain to get a fair amount of value-hounds sniffing around your stock.

Betting on high-quality "jockey stocks" is one of the easiest, hands-off ways to capitalize on a downturn, but when you throw in a seemingly strong play on water infrastructure, PICO gets all the more interesting.

It's obviously way too early to crown PICO as the "next" wealth-creating miracle, but with a compounded equity growth rate of 32% in the three years leading up to July 2008, the Berkshire comparisons will likely only get stronger over time. I'm not sure, but that spells future book value premium to me.

But what do you think about PICO Holdings, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 130,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.