Boyar Asset Management's Top 5 Holdings

A look into the top holdings of our Value Investing Live guest

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Nov 11, 2021
Summary
  • Firm's top holdings show strong performance.
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Jonathan Boyar is 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.

Boyar Asset Management specializes in investing in the equity securities of intrinsically undervalued companies. The firm’s analysis of financial statements is driven by economic reality, not generally accepted accounting principles. It believes that by purchasing 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 clients may profit when the assets are acquired by a third party.

Based upon this strategy, the firm’s top holdings include Microsoft Corp. (

MSFT, Financial), The Home Depot Inc. (HD, Financial), JPMorgan Chase & Co. (JPM, Financial), Ameriprise Financial Inc. (AMP, Financial) and Bank of America Corp. (BAC, Financial).

Microsoft

The firm’s position in Microsoft (

MSFT, Financial) has been around since the fourth quarter of 2013. The holding has seen constant reductions throughout the last several years, dropping to 55,450 total shares from 122,422 shares. The holding currently maintains a 10.30% weighting in the equity portfolio and has landed at a solid total estimated gain of 321.16%.

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Microsoft develops and licenses consumer and enterprise software. It is known for its Windows operating systems and Office productivity suite. The company is organized into three equally-sized broad segments: productivity and business processes (legacy Microsoft Office, cloud-based Office 365, Exchange, SharePoint, Skype, LinkedIn, Dynamics), intelligence cloud (infrastructure- and platform-as-a-service offerings Azure, Windows Server OS, SQL Server) and more personal computing (Windows Client, Xbox, Bing search, display advertising and Surface laptops, tablets and desktops).

On Nov. 11, the stock was trading at $333.10 per share with a market cap of $2.50 trillion. According to the GF Value Line, the stock is trading at a significantly overvalued rating.

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GuruFocus gives the company a financial strength rating of 7 out of 10, a profitability rank of 9 out of 10 and a valuation rank of 1 out of 10. There is currently one severe warning sign issued for assets growing faster than revenue. The company’s exceptional profitability rank is propped up by dominant operating and net margins.

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Top guru shareholders in Microsoft (

MSFT, Financial) include Ken Fisher (Trades, Portfolio), Pioneer Investments, Primecap Management, Chase Coleman (Trades, Portfolio) and Dodge & Cox.

Home Depot

A holding in Home Depot ranks second among the firm’s top five holdings. The 30,095 shares have performed well within the equity portfolio at a total estimated gain of 168.73%. The holding has seen numerous reductions over the last several years as share prices have risen dramatically, but it still maintains a 6.51% weighting.

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Home Depot is the world's largest home improvement specialty retailer, operating nearly 2,300 warehouse-format stores offering more than 30,000 products in store and 1 million products online in the United States, Canada and Mexico. Its stores offer numerous building materials, home improvement products, lawn and garden products and decor products and provide various services, including home improvement installation services and tool and equipment rentals. The acquisition of distributor Interline Brands in 2015 allowed Home Depot to enter the maintenance, repair and operations business, which has been expanded through the tie-up with HD Supply. The addition of the Company Store brought textile exposure to Home Depot's lineup.

As of Nov. 11, the stock was trading at $366.30 per share with a market cap of $386.38 billion. The GF Value Line shows the stock trading at a modestly overvalued rating.

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GuruFocus gives the company a financial strength rating of 5 out of 10, a profitability rank of 9 out of 10 and a valuation rank of 2 out of 10. There is currently one severe warning sign issued for a Beneish M-Score indicating the company may manipulate its financials. The company’s return on invested capital is more than adequate to support its weighted average cost of capital and falls in line with the strong profitability rank.

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Home Depot (

HD, Financial) shares are also owned by Ken Fisher (Trades, Portfolio), Pioneer Investments, Spiros Segalas (Trades, Portfolio), Tom Gayner (Trades, Portfolio) and Mairs and Power (Trades, Portfolio).

JPMorgan Chase

Falling just behind Home Depot is the firm’s JPMorgan Chase (

JPM, Financial) position at a 6.44% overall weighting. The position saw small additions in the first three quarters of 2021, but was pulled back to 59,756 shares under ownership. At an average price paid per share of $62.75, the holding sits at a total estimated gain of 114.02%.

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JPMorgan Chase is one of the largest and most complex financial institutions in the United States, with more than $3 trillion in assets. It is organized into four major segments: consumer and community banking, corporate and investment banking, commercial banking and asset and wealth management. JPMorgan operates, and is subject to regulation, in multiple countries.

The stock was trading at $168.06 per share with a market cap of $497.05 billion on Nov. 11. A modestly overvalued rating is given to the stock by the GF Value Line.

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GuruFocus gives the company a financial strength rating of 3 out of 10, a profitability rank of 5 out of 10 and a valuation rank of 5 out of 10. There is currently one severe warning sign issued for poor financial strength. The company’s cash-to-debt ratio of 1.6 ranks worse than 57.31% of industry competitors despite a 10-year high of cash levels.

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Primecap Management,

Ken Fisher (Trades, Portfolio), Chris Davis (Trades, Portfolio), Pioneer Investments and Barrow, Hanley, Mewhinney & Strauss also own JPMorgan Chase (JPM, Financial) shares.

Ameriprise Financial

The firm’s Ameriprise Financial (

AMP, Financial) holding is the fourth-largest holding in the equity portfolio at a 4.51% weighting. The 25,916 shares were purchased at an average price of $108.95 and only major addition was made to the holding in the first quarter of 2017. GuruFocus estimates the total gain of the holding at a respectable 91.75%.

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Spun off from American Express in 2005, Ameriprise Financial has emerged as a major player in the U.S. market for asset and wealth management, with around $1.1 trillion in total assets under management and advisement at the end of 2020. Ameriprise has one of the largest branded advisor networks in the industry, and about 80% of the company's revenue comes from its asset and wealth management segments. Ameriprise has reduced its exposure to insurance with the sale of its auto and home insurance business in 2019 and discontinuing the sale of its proprietary fixed annuities in 2020. Around 90% of the company's pretax earnings are from the United States.

On Nov. 11, the stock was trading at $307.30 per share with a market cap of $34.38 billion. According to the GF Value Line, the stock is trading at a significantly overvalued rating.

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GuruFocus gives the company a financial strength rating of 4 out of 10, a profitability rank of 6 out of 10 and a valuation rank of 2 out of 10. There are currently no severe warning signs issued for the company. 2020 saw the company’s cash flows hit 10-year highs that were easily able to support dividend payouts.

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Other top guru shareholders in Ameriprise Financial (

AMP, Financial) include Andreas Halvorsen (Trades, Portfolio), Pioneer Investments, Ray Dalio (Trades, Portfolio), Mario Gabelli (Trades, Portfolio) and Keeley-Teton Advisors, LLC (Trades, Portfolio).

Bank of America Corp. (

BAC, Financial)

Rounding out the firm’s top five holdings is Bank of America (

BAC, Financial). The holding maintains 157,262 shares that give it a 4.40% weighting in the equity portfolio. Several small additions to the holding in the last year were wiped out by a 5.12% reduction in the third quarter of 2021. At an average price paid per share of $17.18, the holding has secured a strong estimated gain of 116.51%.

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Bank of America is one of the largest financial institutions in the United States, with more than $2.5 trillion in assets. It is organized into four major segments: consumer banking, global wealth and investment management, global banking and global markets. Bank of America's consumer-facing lines of business include its network of branches and deposit-gathering operations, home mortgage lending, vehicle lending, credit and debit cards and small business services. The company's Merrill Lynch operations provide brokerage and wealth management services, as does U.S. Trust private bank. Wholesale lines of business include investment banking, corporate and commercial real estate lending and capital markets operations. Bank of America has operations in several countries.

As of Nov. 11, the stock was trading at $47.85 per share with a market cap of $391.93 billion. The GF Value Line shows the stock trading at a significantly overvalued rating.

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GuruFocus gives the company a financial strength rating of 3 out of 10, a profitability rank of 5 out of 10 and a valuation rank of 1 out of 10. There is currently one severe warning sign issued for poor financial strength. The company’s revenue and net income have decreased each year since 2018, prompting the warning sign.

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Bank of America (

BAC, Financial) shares are also owned by Warren Buffett (Trades, Portfolio), Dodge & Cox, Primecap Management, Pioneer Investments and Diamond Hill Capital (Trades, Portfolio).

Portfolio overview

As of Oct. 18, the firm’s equity portfolio contained 85 stocks with two new holdings. It was valued at $152 million and has seen a turnover rate of 2%.

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The top sectors represented in the portfolio include financial services (22.66%), communication services (19.46%) and technology (17.57%).

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Disclosures

I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours. Click for the complete disclosure
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