Griffin Land & Nurseries: How Undervalued is that Real Estate? ($GRIF)

Griffin Land & Nurseries: How Undervalued is that Real Estate? ($GRIF)

Frank Voisin is the author of the popular value focused website Frankly Speaking, found at

I recently came across a post at Journal of Value about Griffin Land & Nurseries, Inc (NASDAQ: GRIF) that alleged GRIF’s real estate had more value than GRIF’s enterprise value. This is quite a claim considering the company carries its real estate at $116.3 million and has an EV of $186 million, so I thought I would look into it further.

First, what does GRIF do? It has two lines of business: a real estate division which owns and operates commercial and industrial properties as well as develops residential subdivisions in Connecticut and Massachusetts, and a landscape nursery business that supplies independent garden centers and wholesalers. Interestingly, the company also owns a 4% interest in a magazine publisher in the UK.

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The company has only a passing relationship with profitability and its free cash flow is weak. Furthermore, the company trades at a premium to book value and appears to utilize a fairly high level of debt for its performance (D/E of 0.6). I find none of this attractive, and would normally not spend a lot of time looking into this company. But then I came across the Journal of Value article, which showed the following data, taken from the company’s recent 10-K. First, the raw land holdings, which is land to be developed for residential use:

Griffin Land & Nurseries: How Undervalued is that Real Estate? ($GRIF)

Second, we have land used for the nursery operations:

Griffin Land & Nurseries: How Undervalued is that Real Estate? ($GRIF)Finally, we have the company’s developed properties, which are for office and industrial uses:

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At twenty years old, Frank opened the first of what would eventually become four successful restaurants while completing concurrent undergraduate degrees. He later sold these businesses and returned to school to complete concurrent JD and MBA degrees. During this time, he wrote and passed the three CFA exams. Frank takes a value perspective in his commercial real estate endeavours, hunting for unloved and undervalued investment opportunities to add to his investment group’s portfolio. Frank has traveled extensively and lived in Auckland, London, Toronto, and is currently living in Hong Kong with his wife, Danielle, a successful entrepreneur, MBA, author, blogger and international manager for one of the largest global financial institutions. Frank splits his time between consulting and searching for new value investments.
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