As many of you know, Third Ave has been maintaining a sizable position in St. Joe and Fairholme has been picking up a sizable position as well.

http://www.smartmoney.com/barrons/index.cfm?story=20080427-St-Joe-JOE&split=0

St. Joe's New Game Plan

REAL ESTATE AND Florida have been a toxic combination for the past three years. So it's no surprise that shares of St. Joe (JOE: 41.50, -0.73, -1.72%), a land developer based in Jacksonville, have taken a big hit. After peaking in the mid-80s nearly three years ago, they headed south as soon as the Sunshine State's realty market fell apart. At around 40 last week, the stock had lost more than half its value since mid-2005.

The bear case on the stock, which has had considerable short interest, is that the state's depressed real-estate market won't recover at least until 2010.

But some prominent value investors, including Third Avenue Management, have taken big stakes in St. Joe, which, they argue, is well positioned to rebound once the market turns. A recent stock offering, which netted the company $580 million, was dilutive to existing shareholders but let St. Joe wipe out its debt, erasing any concerns about its liquidity. The company also eliminated its dividend and said that it would buy back shares when it viewed this as appropriate.

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Based on a recent share price of just under 40, McGrath estimates that investors were paying a little more than $10,000 an acre for St. Joe's prime land, including the holdings around the new airport. That's way below the $266,000 an acre St. Joe averaged in its commercial land sales last year.

As for the impending change in the executive suite, there shouldn't be any big shifts in direction beyond those underway. Greene is respected by investors. "He came up through the ranks and he really understands the potential of the land," says Bruce Berkowitz, CEO of Fairholme Capital Management.