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PICO Holdings Inc. Message Board

  • long_or_short_of_it long_or_short_of_it Dec 18, 1999 11:19 AM Flag

    Re AZX,

    my guess is those holding AZX are probably envious of PICO and are looking for a hose to connect to their tail pipe. Perhaps AZX overpaid for Madera?

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    • As a long time holder of PICO I have very mixed
      feelings about this offering. The bad news is that the
      present holders are being asked to put up more money when
      in almost all cases we have the amount invested in
      the company we are confortable with. The good news is
      that someone who has had a very GOOD look at the
      company has decided to put in $50 million. We can all be
      very sure that the $50 big ones got to look into all
      the corners and get all the questions answered.
      Naturally we as ordinary shareholders couldn't get anything
      answered, but that is the way wall street works. The most
      important point is that the $50 is being put in. In all
      probablity management IS putting up money but that answers
      one of the old complaints about management which is
      that they did not have much money in the deal. As far
      as diluting the current shareholders we can all buy
      below the $15 in today's market. There seems to be a
      very direct correlation between our feelings about a
      company and whether or not the price of the stock is up
      or down. This has been a very disappointing stock
      but perhaps, and it is a perhaps, the company has
      been doing just fine but the market won't give it any
      credit. As we all know this market is very narrow in its
      winners. Classic value build ups like PICO are more than
      dead in the water. They have always said that the
      build out of their water basin in Arizona was $10
      million. Remember that the big cost of these water holding
      areas is the pipeline getting the water to the user. If
      the reservior is near an existing pipeline, as is
      true in PICO's case, than all is required is a line
      in, settling areas, and pumps to get it out. What is
      most disturbing to me is that they have not either
      made the insurance operation larger or gotten rid of
      it. It seems to be very dead capital. I would expect
      good news BEFORE the rights offering because they
      would be very liable is they released it any time
      afterward. They will have to have an offering circular and
      we will be able to see something. If they release
      good news before the offering then the price will go
      over the $15 number and it will be easier to pull in
      the money. Remember they do want the additional
      capital. They have always said that there is a current
      window to buy cheap water assets which will close in
      another year or so. Good luck to us all.

      • 1 Reply to stayingrich
      • is if someone has said they are willing to pay
        $15, this market is incredibly inefficient in allowing
        the stock to trade at 14 1/16.

        I added to my
        position on the news. To those who have ridden this one
        down and think every other stock has gone up except
        this one, you need a reality check.

        holders need do nothing they don't WANT to do. In my
        mind, it would seem to me if you are not a buyer in the
        rights offering you should be a seller of the

        Perhaps that is what we saw Friday. One day does not make
        a trend and I'll be watching to see how holders
        react when they think about this opportunity.

        is evident to me the Board of Directors was not
        interested in doing a secondary offering at below book and
        that is why it is being done in the manner announced.
        The Board believes the market has undervalued its
        shares and to protect the shareholders from being
        diluted this is the only way to proceed. That is of
        little consolation to the short sighted, but they will
        be gone long before the offering becomes

        If your portfolio has grown this year, I recommend
        buying NOW while it is below the rights price. The
        window of opportunity will close and you can kick
        yourself into the next century if you coulda and

        As to the $10 MM cost, I guess I'm just having a
        tough time wrapping my mind around a cost which appears
        low to me. I know what 1 MM acre feet looks like. To
        be able to double that capacity and to do it for
        only $10 MM blows me away. Engineering, legal,
        approvals, constuction, interest, taxes, etc. add up. I hope
        you are correct.

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