Crimson Wine Group

Crimson Wine Group (ticker: CWGL). Look it up - it is a publically traded wine company (trades OTC I believe) that is a holding company for several wineries, including in Napa, Sonoma, Oregon, Washington, and other locations on the West Coast of the U.S. The company was a spin out from Leucadia (which bought and is now Jefferies), the holding company for Joe Steinberg. The company owns some premier brands, such as Pine Ridge and others, and while it produces wines and continues to make money, the real asset of the company is in the land it holds.

As a stockholder, I attended the annual meeting in Napa last summer (anyone who holds shares can too). First, contrary to Ilana's post early this quarter, they do pay dividends in wine :) (or at least they provide several free bottles of wine, in addition to tastings, for their shareholders who attend). More important to many of the discussions we have had about owning vineyards during the quarter, however, is that several shareholders at the annual meeting asked whether or not Joe planned to sell off the land and split the vineyards up. The reason being that the land is currently held on the companies book at the value purchased, something like $50mm, whereas current market rates would place the value of the land alone at $300 - $350mm. With the stock currently trading at only $200mm, many investors have bought the stock hoping that a savvy investor, such as Joe Steinberg, plans to sell off the assets, which would create significant upside for a currently "undervalued" stock. That said, my observations from the meeting are that owning the vineyard is much more of a hobby and passion - Joe, like others, probably likes to own the vineyard for sentimental and bourgeoisie reasons, rather than as an opportunity to generate immediate value through financial engineering. While I am sure Joe, or more likely his heirs, will eventually execute the plan many investors would like to see happen to generate significant returns, it is probably not happening any time soon - making this much less likely of a stock for immediate appreciation, and more of an exercise in trying to time the market (and Joe or his heirs' whims).