Oddball Stocks Newsletter Excerpt - Pinelawn Cemetery (Issue 38)

This is an excerpt from our Company Updates in Oddball Stocks Newsletter Issue 38 (January 2022): 

We recently did a deeper dive on Pinelawn Cemetery and its “purchase money certificates” that trade as PLWN on the OTC and collectively are entitled to “one-half the gross proceeds of the sale of the use of lots in Pinelawn Cemetery.” One thing that we were able to confirm is that there are 127,850 land purchase certificates outstanding. That means that the market capitalization of these interests, in total, is $67 million at $525 per share. We have a list of certificate shareholders that, while not current, shows that members of the Locke family, which control the cemetery nonprofit, owned something like 30,000 of the certificates. Rather than worrying that the cemetery management would want to disadvantage the certificates, it actually appears as though their incentives are aligned with the PLWN holders. In fact, if anything the State of New York has gotten upset that too much was being paid to the certificates.

Our understanding is that in 2004, Pinelawn had half of its 785 acres unsold. It is a bit difficult to tell how much is unsold now, but keep in mind that cemeteries have evolved towards denser ways of sharing the same remaining, limited space. Suppose that Pinelawn had 300 developable acres remaining. That would mean that the current “enterprise value” is $67 million divided by a half-interest in 300 acres, or $450,000 per acre. If you can fit 400 “lots” per acre on 300 acres that would be $1,000 per lot. Since the lots are worth quite a bit more than that, the back of the envelope math is there for the certificates to still be pretty attractive at this price.