When it comes to stumbling upon a chest of hidden treasure looking through stocks in the market, there’s no better place to look than towards companies with large land holdings that they’ve owned for a long time. This New Mexican oil company and homebuilder (now just a homebuilder) caught my eye in October. While I have enjoyed a 22.95% gain on the stock since that time, I believe that this company has the potential to rise another 18.9% before I would consider it to be fairly valued.
This company also has a unique moat around it. This company owns almost all of the land that’s available to build on in the county where it operates. This county sits on the edge of a large city that has run out of room to expand, despite needing to as it has morphed into a growing tech hub over the past several decades. This means that this homebuilder can, to a very very large degree control the speed at which housing is built in this community, and in turn has a much greater degree of pricing power than if they had to compete with other homebuilders in the area.