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Graham Griffin
Graham Griffin
Articles (81) 

Value Investing Live Recap: Jonathan Boyar

Key takeaways and questions

September 30, 2020 | About:

GuruFocus had the pleasure of hosting a presentation with Jonathan Boyar, president of Boyar Intrinsic Value Research, an independent research boutique established in 1975 that counts some of the world's largest sovereign wealth funds, hedge funds, mutual funds and family offices as subscribers. He is also a principal of the Investment Manager, which has been managing money utilizing a value-oriented strategy since 1983.

Mark Boyar, Jonathan's father, began publishing independent equity research on intrinsically undervalued companies in 1975. This led to the establishment of Boyar Asset Management, a Registered Investment Advisor, in 1983. True to Mark's vision, Boyar Asset Management specializes in investing in the equity securities of intrinsically undervalued companies. We define intrinsic value as the amount that would be paid to stockholders if a business were liquidated or sold. Boyar Asset Management evaluates a company in the same manner as a private equity buyer would.

Their analysis of financial statements is driven by economic reality, not generally accepted accounting principles (GAAP). They believe that if they purchase assets at significant discounts to their intrinsic or private market value, over a reasonable period of time the stock market will either reflect the true higher value of those assets or their clients may profit when the assets are acquired by a third party.

Watch the full presentation here:

Key takeaways

The team at Boyar looks at investing from the perspective of a potential acquirer. They look long term at a company's results and determine if there is an opportunity to make money through a market correction or the company itself being acquired. This thought process is then channeled into several different approaches.

There were four different approaches that Boyar defined within his presentation looking at business value, hidden assets, franchises and "fallen angels." Each one of these approaches seeks to find value in a company that is either unrecognized or underrepresented in the company's share price. Alongside these approaches, Boyar explained that there are special situations in which they will look at spinoffs and companies emerging from bankruptcy.

Within all of these approaches, there is one constant that must be present for Boyar and his team to get involved. Regardless of how undervalued a company may be, there must be some form of catalyst or trigger that will elevate a company's stock price over a reasonable period of time. Without a catalyst or trigger, that company could remain undervalued for an extremely long period of time.


During the presentation, Boyar chose to examine several different companies that he believes offer his team good investment opportunities. He lumped together Madison Square Garden Sports Corp. (NYSE:MSGS) and Madison Square Garden Entertainment Corp. (NYSE:MSGE).

Boyar explained that he believes both of these companies are intrinsically undervalued due to the public opinion of ownership and sports team performance. With ample liquidity and access to emerging and expanding revenue streams, these companies are viewed as likely candidates for acquisition in the future.

Boyar also dove into Coca-Cola Co. (NYSE:KO) and The Walt Disney Co. (NYSE:DIS) as other companies that offer good opportunities. He explained that in recent years Coca-Cola has been able to shift to an asset-light business model after acquiring its bottlers and adapt their product to current market trends.


Disney, on the other hand, has seen the impact of the pandemic, yet has evergreen intellectual property that dominates current media trends. Alongside these franchises, the company dove headfirst into streaming and has seen massive success.


During the question-and-answer section, Boyar received a great question asking if there were any industries that did not favor his team's approach toward investing. He examined both energy and biotechnology as answers to this question.

Energy came with a relatively simple and straightforward answer. Companies that deal in oil and gas have a set price they must be charging to break even and they are singular in their assets. Boyar sees a lack of opportunity to have a business in that situation be purchased and for his team to see profits.

Biotechnology, on the other hand, was described as hit or miss when looking at smaller companies. The company in question will either succeed or fail with their technology or treatment. If it fails, that leaves nothing on the table to be gained. However, Boyar did acknowledge that big pharmaceutical companies can work well within his model.

The session also saw multiple guests asking about the best way to identify a value trap. Boyar explained that it really comes down to getting your hands in the dirt and finding your own answers. He recommends getting your hands on the financial data and learning for yourself if a company is a good investment.

Disclaimer: Author owns no stocks mentioned.

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