CKX LANDS, INC. (CKX) stock intrinsic value fair value estimate & owner earnings analysis

CKX Lands owns about 7,023 net acres in southwest Louisiana and earns money from oil and gas royalties, timber sales and surface leases (farming, hunting, pipeline rights of way). It has two part-time employees, its President and its CFO. In 2025 revenue was $838,543: oil and gas $415,469, timber $94,825, surface $328,249. In the first half of 2026 revenue was $338,974, about $678,000 a year. After the land sale described below, the company is mostly a pile of cash with a small land operation attached. What the shares are worth is mainly the cash. On November 18, 2025 the company sold 6,548 wholly owned acres to Southern Pine Plantations of Georgia for $8,618,022, about $1,316 an acre. On June 30, 2026 it held $15.3 million of cash plus $2.25 million of short-term investments, $17.55 million in total or about $8.55 per share (2,053,129 shares), and no debt. The land that remains is harder to turn into cash: only about 715 acres are wholly owned. Roughly 90 percent of the net acres are co-owned with others, mostly a 1/6 undivided interest in about 33,200 acres (5,533 net acres), with no written co-ownership agreement, so major decisions such as selling or leasing the property need every co-owner to agree. The company can sell its own undivided interest, and says it expects to seek a partition (division) of the co-owned land. It cannot be sure of reaching a negotiated partition and cannot be sure of avoiding a court-ordered one. A formal review of strategic alternatives began in August 2023, and in April 2024 the company reported preliminary interest from multiple parties. The only large transaction so far is the November 2025 sale. The operating side does not earn its keep. General and administrative expense was $687,441 in 2025 and $384,487 in the first half of 2026, against land income after direct costs of roughly $613,000 a year. Excluding land-sale gains and interest on the cash, 2025 income from operations was only $83,295. We value the cash separately, so we leave interest on it (about $265,000 in the first half of 2026) out of the operating stream. What is left is a small loss of about $66,000 a year after tax in our base case. Cash earnings per share over 2016-2025 have been small and uneven, and two years are distorted: 2022 (a one-time award of all 357,000 plan shares to the two officers, a $2.3 million charge, about 18 percent of the shares then outstanding) and 2025 (tax on the land-sale gain). Excluding those, the median of the other eight years is about $0.08 a share, a good part of it interest on cash. Cash earnings per share fell from $0.13 in 2024 to a loss in 2025, mostly because of that tax, and we assume no growth in year one. Land-sale proceeds are not counted in operating earnings; we value them separately. Base case: $8.91 per share. The business is worth cash of $17.55 million plus about $1.2 million from continuing the pace of small parcel sales the company has kept up in every year since 2018 (proceeds of $359,082 in 2020, $1,233,197 in 2021, $18,972 in 2022, $149,992 in 2023 and $140,582 in 2024: average about $380,000, median $150,000). We assume $300,000 of gross proceeds a year (about 228 acres at $1,316), taxed on the gain, with the income from those acres lost as they are sold. Against that sit about $0.5 million of operating losses over ten years, in present value. The company owes nothing, so the difference is about $18.3 million. No value is given to land beyond that pace, because for the co-owned interests we can point to no sale price and no timetable. That is why the base case is little more than the cash. Bear case: $7.12 per share. Business worth about $16.0 million before dilution; it owes nothing. The strategic process produces no further land sales for ten years. Oil, gas and surface income suffers a slump like 2018 to 2020, a period that included the 2020 shutdown and Hurricane Laura, when revenue fell 44 percent (from $1,194,763 to $671,944); we apply that cut for three years, with general and administrative costs of $770,000 growing 3 percent a year. Losses over ten years cost about $2.0 million in present value, and only the 715 wholly owned acres are sold, in year 10 at $1,316 an acre, adding about $0.5 million. The 10-K shows 196,900 shares that expired unearned and are available for future awards; the board granted every available share in 2022, so this case assumes they are all granted, spreading the value over about 2.25 million shares. Per share: cash of $8.55, less about $0.96 of losses, plus $0.22 for the 715 acres, less roughly $0.68 of dilution. Bull case: $11.74 per share. Business worth about $24.1 million; it owes nothing. The strategic review ends in a sale of all 7,023 net acres by the end of year 3 at the price actually received in November 2025, about $1,316 an acre ($9.24 million), against a carrying value of $4.23 million. About $1.2 million of tax on the gain leaves $8.0 million. Three years of operating losses cost about $0.18 million. This case assumes the co-owned interests sell at the same price per acre as the wholly owned timberland, which has not been tested. What would make this wrong: the co-owned interests being worth much more or much less per acre than the one sale price; the review running another several years while costs continue; another large share award; or a hurricane (Laura damaged about a third of the standing timber in 2020). The filings do not say what kind of land the remaining 715 wholly owned acres are, so applying the November price to them is an assumption. Our previous figures (bear $8.55, base $10.50, bull $12.25) were built on different assumptions about unsold land and are not comparable. Nothing in the business has changed since: the latest filings are the 2025 annual report and the June 2026 quarterly report. Margin-of-safety price: $5.25. We are sure of the cash and not sure of the earnings: they are small, and operations cost more than the land earns. The worst plausible outcome is the cash being eaten by a long process, insider share awards, litigation over partition, or an acquisition that earns little. The company has no debt, so it would survive, but the 2022 award shows how quickly shareholders' value can be handed to insiders. If the land sales take longer or the co-owned interests are worth less than the one sale price, the shares are still worth roughly the cash less several years of losses and dilution, about $7 to $8.50. The price assumes a holding period of about three years, during which the company pays no dividend (it repurchased $147,614 of stock in 2025 and $208,854 in 2024). The cash earns about 3 percent interest, which covers running costs, but that is far short of 20 percent, so the return has to come from a price below the cash and the gap closing through a sale, partition or buyback. If the shares are worth about $9 in three years, a $5.25 price implies about 20 percent a year, and a sale like the bull case would imply much more. That is about $3.30 a share below the cash on hand today.