One-glance verdict
Overvalued
$13.14 our estimate vs market $15.79
20% above our estimate, beyond the bull case
Fundamentals snapshot
CKX Lands, Inc.
CKX · ASE · Energy · Oil & Gas E&P
Current price
$15.79
52-week range
$8.66 - $24.74
Market cap
$32.42M
Balance sheet
Healthy
0.25x Concerning
Net cash $15.30M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
0 Risks
3 rewards · 0 risks
- Reward Returns 14.4% on equity, ahead of 20% of its peers.
- Reward Free cash flow was positive in 4/10 years.
- Reward Trades at 11.1x P/E vs peer median 14.3x (22.0% cheaper).
What this company does
CKX Lands, Inc.
CKX Lands, Inc. owns and manages land, mainly making money by leasing it to oil and gas companies, growing and selling timber, and from other land uses like farming and hunting. This means their income is tied to how much oil and gas is being produced and the value of their timber resources. Understanding these two main areas is key to grasping how CKX Lands makes its money.
How the company got here
CKX Lands, Inc. started in 1930 as Calcasieu Real Estate & Oil Co., Inc., created by a bank to hold mineral interests that the bank couldn't keep on its books. Over time, as these mineral interests began to generate income from oil and gas, the company used that money to buy more land. In 2005, the company changed its name to CKX Lands, Inc. to make it clearer that it's primarily a land management company, not an oil and gas producer. The company's history shows a shift from holding mineral rights to actively managing and acquiring land, using its resources to grow its property portfolio.
What it actually does
CKX Lands, Inc. is essentially a landowner that makes money from its properties in various ways. Instead of drilling for oil or cutting down trees itself, it leases out its land to other companies that do these activities. Think of it like owning a large apartment building: you own the property, and you rent out the apartments to tenants who live there and pay you rent. CKX does something similar, but with land, oil and gas extraction, timber, and other surface uses. The company's income comes from these leases and sales, rather than from directly operating the businesses on its land.
Oil and Gas
This part of CKX Lands' business involves owning land that has oil and gas underneath it. The company doesn't explore for or drill for these resources itself. Instead, it leases the rights to do so to oil and gas companies. These companies then extract the oil and gas, and CKX receives a royalty payment, which is a percentage of the revenue or production from the wells on its land. It holds small royalty interests in about 20 different producing oil and gas fields, meaning its income from this segment can fluctuate based on oil and gas prices and how much is being produced.
Timber
In its timber segment, CKX Lands owns land with forests. It doesn't manage the trees or harvest them directly. Instead, it sells the timber on its land to third-party buyers who then harvest and process it. This means CKX earns money from selling the standing trees, and the income from this segment depends on the cycles of timber harvesting and sales. It's like owning an orchard and selling the fruit to a distributor who then sells it to grocery stores.
Surface
The surface segment is where CKX Lands generates income from the various uses of its land that aren't related to oil, gas, or timber. This includes leasing land for farming, allowing companies to use strips of land for pipelines or other infrastructure (known as rights-of-way), and even leasing land for hunting activities. This segment is noted as a significant contributor to the company's overall revenue, showing the diverse ways its land can be utilized and monetized beyond natural resources.
What management is betting on now
CKX Lands is currently exploring strategic alternatives to enhance shareholder value, which could include selling the company or parts of its assets. This means management is looking at different options to get the most value for the people who own shares in the company. They recently sold a significant portion of their wholly-owned land, indicating a move towards potentially streamlining their holdings or capitalizing on current market conditions. The company is not involved in the day-to-day operations of oil and gas extraction, farming, or timber management, focusing instead on its role as a landowner and strategic asset manager.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
Revenue
$168.31K
Net income
$122.23K
Diluted EPS
0.06
Operating cash flow
$-411.89K
Free cash flow
—
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Sources
Revenue
$170.66K
Net income
$55.24K
Diluted EPS
0.03
Operating cash flow
$-52.33K
Free cash flow
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Sources
Revenue
$121.78K
Net income
$2.57M
Diluted EPS
-2,027,030.69
Operating cash flow
$123.33K
Free cash flow
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Sources
Revenue
$232.64K
Net income
$166.30K
Diluted EPS
0.08
Operating cash flow
$242.27K
Free cash flow
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Sources
Revenue
$135.94K
Net income
$161.04K
Diluted EPS
0.08
Operating cash flow
$-24.64K
Free cash flow
—
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Sources
Revenue
$348.18K
Net income
$115.57K
Diluted EPS
2,027,032.00
Operating cash flow
$118.66K
Free cash flow
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Sources
Revenue
$180.57K
Net income
$32.16K
Diluted EPS
-1,991,337.18
Operating cash flow
$97.36K
Free cash flow
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Sources
Revenue
$171.27K
Net income
$54.12K
Diluted EPS
0.03
Operating cash flow
$-246.50K
Free cash flow
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Sources
Is it cheap or expensive?
Fair value $13.14 vs current price $15.79
Our most-likely fair value is $13.14 a share — about 16.8% below today's price of $15.79, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net cash $15.3M - more cash than debt. Interest coverage 0.2x.
Net debt
$-15.30M
Interest coverage
0.25x
CKX Lands, Inc.'s profit covers its interest bill about 0.2 times over. which is weaker than most peers shown here.
Healthy
Worse cushion
Baseline
Better cushion
CKX
BASELINE
CKX Lands, Inc.
Total debt $0.00 Interest coverage 0.25x This is the baseline the peer rows are being compared against.
Total debt $196.00M Interest coverage 29.21x +11,665% vs CKX Carries about 117.6x more debt cushion than CKX.
Total debt $0.00 Interest coverage 154.66x +62,200% vs CKX Carries about 623.0x more debt cushion than CKX.
Total debt $0.00 Interest coverage 89.39x +35,910% vs CKX Carries about 360.1x more debt cushion than CKX.
Total debt $539.95M Interest coverage 3.50x +1,311% vs CKX Carries about 14.1x more debt cushion than CKX.
What you should know
The case for and against CKX
3 Rewards
0 Risks
Rewards
-
Returns 14.4% on equity, ahead of 20% of its peers.
-
Free cash flow was positive in 4/10 years.
-
Trades at 11.1x P/E vs peer median 14.3x (22.0% cheaper).
Risks
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
11.12x
Forward P/E
—
P/B
1.50x
P/S
46.75x
EV/EBITDA
-352.32x
PEG ratio
1.25x
Profitability
How much profit each dollar creates
Gross margin
95.4%
Operating margin
-7.4%
Net margin
419.8%
ROE
14.4%
ROA
-0.2%
Health
Liquidity and balance-sheet strength
Debt / equity
—
Current ratio
124.62x
Quick ratio
108.20x
Total debt
$0.00
Total cash
$15.30M
Growth
How the business has been compounding
Revenue TTM
$693.40K
Revenue 5Y CAGR
3.0%
EPS TTM
1.42
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$-98.62K
Free CF TTM
$459.63K
FCF margin
66.3%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
2018-04-04