- Boyar Research’s stock selections have an average annualized return of 20% over a 7-year period.
- At Jim Osman’s The Edge conference, the president of Boyar Research shared the strategy behind this outperformance.
- He also explained the thesis behind 3 high conviction stock ideas that have a potential of 38% or more.
The traditional approach of
buys stocks that look cheap relative to their book value. More often than not, these cheap stocks are discovered by investors looking at financial statements and documents to establish stocks that others are underestimating.
Independent research firm Boyar Research tears up the value investing playbook by examining value stocks through a private equity lens and demonstrating that finding value choices can be more than just a review financial statements.
It’s a strategy that paid off. Boyar Research’s choices have consistently outperformed the market. Over a 7-year period, the average annualized return on stocks profiled by Boyar is 20%, almost 5% above that of the S&P 500.
The outperformance is even more striking when it comes to microcap stocks. Over a 5-year period, the average returns on Boyar’s microcaps are 28.7%, 17% higher than the S&P. According to Boyar’s website, about one in two ideas has outperformed the index over a period of 1, 3, and 5 years.
At The Edge conference on November 18, Jon Boyar, president of Boyar Research, shared three high conviction buying ideas that exemplify three different schools of thought in value investing.
“Deep research is really at the heart of what we do, we analyze every business the same way an acquirer would,” said Boyar Conference. “… a lot of the companies that we profile or buy for clients end up being bought out, so the selling decision is really made on our behalf most of the time. “
The conference was coordinated by legendary investor Jim Osman to raise funds for the Alzheimer’s Association.
Similar to Osman’s approach to investing in special situations, Boyar focuses on catalysts.
“You can find the biggest company in the world that sells for a low price,” Boyar said. “But if it doesn’t increase in value, that’s no use to you. So for us, finding catalysts helps us avoid the value traps, they are critically important to us.”
Boyar’s strategy is straightforward, with an emphasis on reading and curiosity to find common ideas regarding the use of screens and technological algorithms. This approach combined with extraordinary patience makes it possible to find hidden gems.
“We like to look at entire industries that are not in favor and pick out companies from those industries that we think are the survivors,” Boyar said. “We like to look at hidden assets, one, because they can’t be filtered… and we like special situations. “
The stocks on Boyar’s list become high conviction ideas to hold for the long term, between two and four years, and in some cases, 10 to 15 years. He shared three of these main ideas at the conference.
“I own all of the stocks that we are presenting today,” Boyar said. “And I don’t think you would want me to do a presentation where I haven’t.”