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Boyar - Searching For Value Since 1975
Research Methodology
Boyar Research’s Investment Methodology
Boyar Research views a corporation and its asset base in the same manner a business executive would evaluate it. We take the balance sheet, tear it apart, and reconstruct it in accordance with economic reality rather than GAAP accounting. If we can purchase assets at significant discounts to their intrinsic values, we believe that over time, either the market will accurately reflect those values, or the assets of the corporation will be acquired by a third party. It is interesting to note that approximately 40%* of the companies profiled in AAF since 1975 have been acquired or liquidated, the vast majority at significantly higher prices then when originally probed. We seek to find such opportunities across the market cap spectrum and within a wide variety of industries.

Boyar Research mainly publishes reports on companies whose intrinsic value we believed to be significantly higher than their current market value. In addition, Boyar Research may publish reports on companies or industries that we think are significantly overvalued. To receive an example of a report on an industry we believe was overvalued please click here.


STOCK SELECTION STRATEGIES
In seeking out companies that trade at attractive valuations, we make use of the following strategies:
Franchise Approach
A number of companies have, over time, created valuable consumer
franchises. Their products are recognized easily by consumers
around the world. Such franchises are virtually impossible for a
potential competitor to duplicate. These "franchise" companies often
raise prices or even charge a premium for their products or services
without losing market share. The value of this competitive advantage
may not be adequately reflected in the price of the company's shares.

"Hidden" Asset Method
"Hidden" assets are assets whose current values are
undervalued on a company's financial statements-a situation
which may lead to a disparity between market value and
intrinsic worth. Hidden assets include real estate, reserves
of natural resources, cellular or cable franchises, and
inventory reserves resulting from the last-in, first-out
method of inventory accounting. Asset Analysis Focus
adjusts the value of these assets to their current
market value to calculate the intrinsic worth of the
company, which may be much higher than the value the stock
market accords them
.

Restructuring Plays, Breakups, and Spinoffs
A company interested in enhancing shareholder value may spin off a
portion of its assets to current stockholders through the creation of a new
public entity. The common stock of the newly spunoff company may
trade temporarily at a substantial discount to its underlying NAV. This is
in part because this new entity is not immediately followed by Wall Street
analysts. However, the newly focused "pure play" companies often
perform well and soon receive more coverage than they ever would
have as one ungainly and difficult to analyze conglomerates.

Business Value Method
Excessive pessimism about a particular industry or a specific
company may result in extreme disparities between the stock
market value of the company and the price that would be placed
upon the company if the entire enterprise were acquired by a
knowledgeable private investor. When employing this method of
valuation, Asset Analysis Focus considers the subject company's
historical earnings power, present product mix and financial
strength as well as the prices at which similar companies have
been acquired in the recent past. Asset Analysis Focus's findings
help place an appropriate value on the shares of the subject
company.

Catalysts and Triggers
We prefer to invest in companies whose intrinsic value is likely to be
realized via one or more significant corporate events, including the
following:

-Acquisitions, Restructurings, or Liquidations
-Spin-Offs
-Change in Leadership (Octogenarian Effect)
-Corporate Buy-Backs
-Changing Corporate Governance
Fallen Angels
Well known companies that were once the "darlings" of Wall Street
may fall out of favor with the investment community, causing their
stock prices to plummet to unrealistically low levels. Asset
Analysis Focus may issue a report on a particular company if it
determines that the fundamentals of such a concern are not
permanently impaired. Restructuring Plays, Breakups, and
Spin-offs. A company interested in enhancing shareholder value
may spin off a portion of its assets to current stockholders through
the creation of a new public entity. The common stock of the newly
spun-off company may trade temporarily at a substantial discount
to its underlying NAV. This is in part because this new entity is not
immediately followed by Wall Street analysts. However, the newly
focused "pure play" companies often perform well and soon
receive more coverage than they ever would have as one
ungainly and difficult to analyze conglomerates.

*Past performance does not guarantee future results. Please contact Jonathan Boyar at jboyar@boyarvalue.com for performance information.