Little-Known PICO Showing Signs of Life

Tickers in this article: PICO UCP

NEW YORK (TheStreet) -- PICO Holdings , historically a mini-conglomerate of sorts that has been a disappointment in recent years, is showing signs of life.

This past week, the stock breached the $25 mark for the first time in two and a half years. As usual, however, there is little to no news about the company, which has long confounded investors, including yours truly.

Perhaps best known for its ownership of water rights and storage in the southwest through its Vidler Water Co. subsidiary, the company has morphed over the years. At one time, it also owned 1.2 million acres of former Nevada railroad land, which along with the water exposure, is what led to my initial position in the company.

The company sold parcels of land over the years piece by piece, and the 480,000 acres that remained were sold for $31 million in late 2011 when the company parted with its Nevada Land Resources subsidiary.

The company is still active in real estate, but of much better quality than its previous Nevada land holdings. Subsidiary UCP Holdings , which PICO took public last summer, acquires and develops residential real estate, primarily in Northern California and the Puget Sound area in Washington state.

PICO owns about 58% of UCP, worth $70 million based on UCP's market capitalization of $122 million. Shares of UCP have done little since the IPO, up about 12%, but the stock has been inching up and is trading at an all-time high.

UCP itself appears to have substantial upside potential. The balance sheet is solid, with $58.5 million, or $7.55 a share, in net cash (cash less debt).

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