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St. Joe’s Pensacola Problems

“With thousands and thousands of barrels worth of crude now starting to wash up on the shores of Florida,” Cramer said Thursday, “I shouldn’t have to tell you that now is not a good time to own beachfront property in the Sunshine State, should I?”

That’s why he put St. Joe , a major landowner and property developer in Northwest Florida, in the Sell Block this week. About 70% of St. Joe’s property is within 15 miles of “the now imperiled coastline,” Cramer said.

It doesn’t matter that St. Joe’s acquired 577,000 acres of land in that area at a very low cost. It doesn’t matter that St. Joe’s has been developing more commercial and industrial space and moving away from its once bread-and-butter luxury homes. And it doesn’t matter that St. Joe’s will file a claim against BP for the expenses and lost business (though a big landowner like this doesn’t make the most compelling plaintiff). The bottom line here is that the company’s contractors already have found tar balls on St. Joe’s beaches, thanks to BP's disastrous spill, and nobody wants that kind of beachfront property.

“The risk from the oil spill is no longer a question of if,” Cramer said, “it’s not even a question of when. Now the only thing we can ask is, ‘How much is this going to hurt?’”

Unbelievably enough, though, three analysts rate JOE “neutral” and another calls it undervalued. But that’s a big reason why Cramer put the spotlight on the company this week – he didn’t want Mad Money viewers getting sucked into this flawed way of thinking. As far as he’s concerned, JOE is a sell, sell, sell.

“St. Joe down 40% off the oil spill isn’t an opportunity,” Cramer said, “it’s a falling knife and it will be able to cut you unless we get some certainty, some clarity about the scale of the damage.”

Call Cramer: 1-800-743-CNBC

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