So let's get a conversation going about the risk vs. reward in AXB. I own some and am thinking about buying some more but want to kick it around. The pluses are that the stock is cheap on a historical basis, the dividend yield is now over 5%, it's not leveraged, and the company owns a huge amount of unique property in Hawaii. The minuses are that the company's shipping business is being hurt by the recession. Also, both it's shipping and agricultural businesses are protected to some degree by the government and they are not that competitive without that protection. The company has a significant investment in commercial real estate which is starting to suffer. On balance, I think it's worth picking up some more at today's price of $24.33.
The Jones Act, together with the fact that Hawaii heavily-relies on ocean transportation (and AXB's Matson subsidiary thereof) adds an important inelastic-demand aspect to a large portion of AXB's revenue and profit, while the real estate portfolio appears to be conservatively-managed as well. I thus bought several thousand shares very recently at an average cost of $24, and view this as a secure mega-yielder (given Bailout-Ben's reduction of short-term interest rates to nil), an asset-play (selling below book value, with a lot of undeveloped land in Hawaii), together with what amounts to a perpetual call option on the eventual recovery of the economy. I think, within 5 years, the stock will be back to where it was over the past 52 weeks (price in 50's).
I liked your message. It is very close to my own feelings.
I think that Benny and the Feds are going to print enormous amounts of money and try to expand the credit supply vastly. In my opinion, this is going to eventually lead to a LOT OF INFLATION. Therefore, I want to own tangible assets like real estate, ships, oil, etc. AXB fits into that picture quite well, so I too recently bought 2000 thousand shares.
In the short-term, the general panic that has collapsed the credit system trumps the Fed's efforts, but you don't want to argue with the Fed when they are determined and intend to persist until they get their way.