This reminds me somewhat of TRC. Similar market cap....$529 million. In TRC the inherent "value" has seemingly been trapped forever by litigation and a never ending approval process for development. I have the opinion it too is worth multiples if ever unlocked.
The southern San Joaquin does not receive a drop of water from Colorado, nor does it compete really with crops grown in Riverside or Imperial County (Counties that receive water from the Colorado).
I have been TRAPPED for years in this black box of a company. One day I hope the Boswell actually closes the gap between its market cap and intrinsic value. But I doubt it.
Thanks for the excellent write up. I guess the key point is whether the owner has the incentive to get a formal listing, or increase the dividend - on top of the assumption that they will move to monetize the water rights. Do you see anything that might suggest a change in owner's incentives/inclinations?
Thanks so much for this. I'm building a shopping list of stuff to buy after the crash, and the Evil Water Company from the movie "Chinatown" is a very definite maybe.
They monetize it mainly through farming - that land is only productive cropland because of the senior rights. That's why the blended NAV bundles in-use water into the farmland comp and breaks out only the "surplus" as a standalone value. They have sold surplus senior water outright before (~137K AF to Kern over the past decade), though it can be legally/politically challenging.
The water rights don't show up in the report because pre-1914 rights carry ~zero book value under GAAP and BWEL is a thin-disclosure pink-sheets filer
Excellent breakdown of BWEL. I noticed institutional holdings are tiny and public data shows zero insider ownership. Is that zero just a function of the Boswell family holding their shares tightly through private entities/foundations, or has there been actual institutional and insider divestment over the years?
Thanks for reading! BWEL trades on the pink sheets and very little information is available, so the insider ownership data on Yahoo, etc isn't accurate or is simply unavailable. Boswells control the vast majority across family members/trusts/foundations
This reminds me somewhat of TRC. Similar market cap....$529 million. In TRC the inherent "value" has seemingly been trapped forever by litigation and a never ending approval process for development. I have the opinion it too is worth multiples if ever unlocked.
Agreed. See a prior post on TRC here: https://groundbreakerre.substack.com/p/tejon-ranch-270000-acres-at-the-gateway
Sorry....As you know, I'm a new follower. I should have scanned your previous posts, and I would have seen that.
No worries! Thanks for reading
Thanks
Good article. Although not convinced it's not a value trap. This thesis has been going around since 2007.
Also this:
https://sjvwater.org/boswell-run-groundwater-agency-agrees-to-work-with-other-kings-county-agencies-after-antagonist-is-fired/
Why are they fighting so much over the water rights if they don't need them and could actively monetise them?
The southern San Joaquin does not receive a drop of water from Colorado, nor does it compete really with crops grown in Riverside or Imperial County (Counties that receive water from the Colorado).
I have been TRAPPED for years in this black box of a company. One day I hope the Boswell actually closes the gap between its market cap and intrinsic value. But I doubt it.
Thanks for the excellent write up. I guess the key point is whether the owner has the incentive to get a formal listing, or increase the dividend - on top of the assumption that they will move to monetize the water rights. Do you see anything that might suggest a change in owner's incentives/inclinations?
Thanks so much for this. I'm building a shopping list of stuff to buy after the crash, and the Evil Water Company from the movie "Chinatown" is a very definite maybe.
This is a brilliant write-up and very unique idea. How did you initially find the idea?
Thanks for reading! It's hard to pinpoint exactly how/when I found it. It started with our Water Rights Thesis (https://groundbreakerre.substack.com/p/water-rights-the-hidden-asset-the) and BWEL was one of the best publicly-traded vehicles found to express that thesis.
So they own these water rights but aren't monetizing them? Want to make sure I follow. The annual report does not mention the water rights.
They monetize it mainly through farming - that land is only productive cropland because of the senior rights. That's why the blended NAV bundles in-use water into the farmland comp and breaks out only the "surplus" as a standalone value. They have sold surplus senior water outright before (~137K AF to Kern over the past decade), though it can be legally/politically challenging.
The water rights don't show up in the report because pre-1914 rights carry ~zero book value under GAAP and BWEL is a thin-disclosure pink-sheets filer
Excellent breakdown of BWEL. I noticed institutional holdings are tiny and public data shows zero insider ownership. Is that zero just a function of the Boswell family holding their shares tightly through private entities/foundations, or has there been actual institutional and insider divestment over the years?
Thanks for reading! BWEL trades on the pink sheets and very little information is available, so the insider ownership data on Yahoo, etc isn't accurate or is simply unavailable. Boswells control the vast majority across family members/trusts/foundations