The independent analyst`s thesis summary on the company is as follows:"PICO Holdings ("PICO") is a one-of-a-kind company focusing on 3 distinct business lines: water rights, distressed real estate, and agribusiness.
"This may seem like a completely random 3 verticals for a company to be involved with, but over the past two decades PICO has made very rational decisions when searching for projects that meet its IRR targets, and has been successful in achieving realized returns. PICO is one of the few ways for public investors to invest in the growing market of water rights, while at the same time not taking on single-asset/industry risk that certain other investments entail (e.g., Cadiz Water Project.IB report available).
"The stock has been beaten down from its pre-recession mid-$40 range, to currently ~$18/share, due to the fact that private and public sector customers have been focused more on near-term liquidity and capital projects as opposed to the more important long-term issue of water scarcity in the Southwest U.S. The company has diversified away from this single-asset risk, and I do not believe the market is giving PICO full credit for a slate of real estate sales the company is planning to make over the coming years nor its Canola crushing plant that should begin to generate significant value to the firm in 2013."
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Source: Equity Brief via Thomson Reuters ONE