Author: samueldavidoff

Mark and Jonathan Boyar were recently interviewed by Andrew Bary for an article that ran in the March 4th edition of Barron’s. The stocks discussed during the interview include Madison Square Garden, MSG Networks, QVC Group, and Tribune Media.

To read the article in its entirety, please click here.

Since the interview was published, Liberty Interactive, which owns QVC, announced that QVC will no longer be a tracking stock (one of the catalysts referenced in the interview). Since then, QVC’s share price has increased from ~$19 to ~$23.

Tribune Media has advanced from $36.82 to almost $40 after Sinclair Broadcasting announced it would be acquiring the company for $43.50 per share. However, we believe the current deal price significantly undervalues Tribune. According to our calculations, Sinclair is acquiring TRCO’s core broadcast operations at just over 7x our 2017/2018 EBITDA (precedent industry transactions are at around 8x) as well as the Company’s valuable TV Food Network stake at 7x our 2018 EBITDA projections.

We would not be surprised if another bidder emerged, or if Sinclair is ultimately forced to increase its offer. Given the potential synergies the acquisition of Tribune Media provides a strategic acquirer (from both a revenue and cost perspective), we believe the business should command a higher price than is currently being offered. The relatively small breakup fee would seem to leave the door open for a competing offer. While there has been press reports that Fox has pulled out of the biding, broadcaster Nexstar is also rumored to be contemplating an acquisition of Tribune Media.

Mark Boyar and Jonathan Boyar were interviewed in the March 4, 2017 issue of Barron’s.

In Barron’s previous interview with the Boyar Value Group, (“How to Buy Dollar Bills for 50 Cents,” Aug. 17, 2013), Mark Boyar recommended five stocks, including Microsoft (MSFT) and Molson Coors Brewing (TAP). Those five stocks have returned an average of 69.1% since then, versus 55.5% for the S&P 500.

In this interview, Mark and Jonathan Boyar revealed that the Boyar Value Group is now partial to Madison Square Garden (MSG), the owner of the New York Knicks and Rangers, as well as MSG Networks (MSGN), a cable operator that broadcasts their games. Both could be takeover plays. They’re fans of media mogul John Malone and his group of companies, including QVC Group (QVCA), the home-shopping outfit. They also like Tribune Media (TRCO).

To read the article in its entirety, please click here.

To receive Boyar Research’s most recent full-length report on the companies featured in the interview, please click here.

Excerpt from the article:

Barron’s: What’s your approach?

Mark Boyar: We buy great businesses that are temporarily mispriced. We’re agnostic with regard to size or industry, but we do tend to avoid cyclical industries. We’re incredibly patient. The turnover in our mutual fund last year was only 4%. We’re reluctant sellers. We don’t like to see our clients pay taxes.

Barron’s: What do you think of the overall market?

Mark: There are a great many stocks that are overvalued, but there still are many, particularly those that are not part of a major index, that remain neglected and quite cheap. This bull market, dating back to March 2009, could become the longest in history. It is quite possible the S&P 500 could get a higher multiple of earnings than it currently has. I wouldn’t be surprised to see the market trade at 22 or 23 times earnings. It’s now at 18 times.

Barron’s: You like both Madison Square Garden and MSG Networks, which separated in 2015. Let’s start with Madison Square Garden.

Mark: It owns the New York Knicks, the New York Rangers, the Madison Square Garden arena, the air rights above the Garden, and the Forum near Los Angeles. The company has a market cap of about $4.4 billion, with $1.4 billion in cash and no debt. That leaves a $3 billion enterprise value [market value minus net cash]. Forbes recently valued the Knicks at $3.3 billion. So you’re effectively getting everything else for zero. Based on the $2 billion price that Steve Ballmer paid for the Los Angeles Clippers in 2014 and marking everything to what we think it’s worth, we value the stock anywhere from $250 to $300 a share, and it now sells at around $180.

Barron’s: Do you see any catalysts?

Mark: The company steadily has been buying back stock. It could lever up the balance sheet and pay out a special dividend, or the controlling Dolan family could try to take it private. There are a host of things that could happen to unlock value. The two-year anniversary of the spinoff is coming in October, and that could give the company more flexibility to do something.

Barron’s: What else appeals to you about it?

Mark: One thing we look for is an intrinsically undervalued business that has a catalyst. But we also look for a margin of safety. When we’re in a market that sells at 18 times estimated 2017 earnings and a lot of the stocks within the S&P 500 are overvalued, we’re happy to find a company that sells at such a discount to intrinsic value.

Barron’s: Let’s move on to MSG Networks.

To read the article in its entirety, please click here.

To receive Boyar Research’s most recent full-length report on the companies featured in the interview, please click here.

Boyar Research was recently featured in Forbes in an article penned by Antoine Gara titled Three Forgotten Stocks Poised to Surge in 2017. The article highlights our investment thesis for Discovery Communications, Brinker International, and Legg Mason (all three companies were recently featured in our annual Forgotten Forty publication).

Below please find an excerpt from the article.

For years Boyar Research has offered up winning stock picks for value investors to study during the holidays when it publishes a list of 40 forgotten companies set to surge in the new year. Since Boyar Research began hunting for its so-called Forgotten Forty stocks, these picks have handily beaten the S&P 500 Index.

The firm pores over Wall Street for unloved companies where it spots a looming positive catalyst, for instance a corporate breakup or a revival in sales growth and investor interest. Last year stocks like industrial pipe and valve giant MRC Global, Scotts Miracle-Gro, workplace uniform specialist UniFirst Corp. and Liberty Broadband were among Boyar Research’s top performing picks, helping the firm’s Forgotten Forty list to an over 16% gain, trouncing the S&P 500 Index’s 11% rise (these figures include dividends).

Boyar’s picks have returned 18.2% annualized over a five-year time frame and 6.1% and 7.6% respectively over ten-year and fifteen-year stretches. This compares to gains of 12.7%, 4.5% and 4.5% by the S&P 500 over similar time frames. Now the firm has a new list of stocks to watch in 2017 and has offered FORBES a look at three stock picks for the new year.

To read the entire article, please click here.

To receive our Forgotten Forty report on Brinker International, Discovery Communication or Legg Mason, please email jboyar@boyarvaluegroup.com.

The 2017 London Value Investor Conference takes place on May 25th with a fantastic speaker line-up.

Boyar Research has been participating in the London Value Investor Conference since 2014 and Jonathan Boyar will be presenting at this year’s conference. Until March 18 you can receive a £180 discount on conference tickets by clicking this link.

Past speakers have included such well-known names as Michael Price, Howard Marks, Jean-Marie Eveillard, James Montier, Charles Brandes, Mason Morfit, and Donald Yacktman – plus many others.

To learn more about this conference, please click on this short overview video that details additional information on the event. In addition, please click here to view a full 30 minute presentation called “Successful Failure” given by Nick Kirrage of the Schroders Value Team at last year’s conference. In the presentation Nick analyses the impact on his portfolio of his investment failures over the past 10 years. He then goes on to detail why these failures are part of an overall strategy which has worked very well for the fund over time. He also provided some details on his investment in Royal Bank of Scotland.

The London Value Investor Conference is the largest gathering of value investors in Europe. The conference will feature presentations from some of the world’s leading investors. The speakers will provide valuable insights into the methods and approaches that have made them successful, comment on the current investment climate and offer specific investment ideas. If you have any questions about the event, please email the organizers at contact@londonvalueinvestor.com.

After the conference finishes there is also the LVIC dinner in the Members Dining Room in the House of Commons, which conference speakers and a limited number of conference delegates can attend.