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SA Interview: Investing In Orphaned Stocks With The Boyar Value Group

Mar. 03, 2018 7:30 AM ETGOLF, MSGS3 Comments
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  • The Boyar Value Group uses a private equity approach to public markets.
  • What are orphan stocks, what creates the opportunity and how to find them are topics discussed.
  • The Boyar Value Group shares a long thesis on Acushnet.

Feature interview

The Boyar Value Group was established in 1975. Through their research division, they publish Asset Analysis Focus and Boyar's Micro Cap Focus which provides some of the world's largest hedge funds, family offices, mutual funds and sovereign wealth funds with in-depth research reports utilizing a private equity approach to public markets. In addition, since 1983 Boyar Asset Management has been managing money for institutions, individuals, and family offices. We recently emailed with The Boyar Value Group to learn more about investing in “orphaned” stocks which is a strategy that they have been implementing for their money management clients. Readers can view a presentation they recently gave where they detailed four high conviction stock ideas.

Seeking Alpha: What constitutes an orphaned stock?

The Boyar Value Group: An “orphaned” stock is a stock that analysts and investors have for the most part disregarded. A stock can become “orphaned” via a variety of ways. A stock may not be included in one of the major S&P indices (S&P 500, S&P 600, etc.) and therefore cannot be bought by index funds as well as “closet” indexers, which tend to focus on stocks included in the major indices to ensure that their performance doesn’t deviate greatly from their respective benchmark. Some of the reasons why companies may be ineligible for index inclusion include companies that are listed in the U.S., but maintain headquarters outside of the U.S., companies with super-voting share class structures and tracking stocks.

These so-called “index orphans” are not limited to small companies. In fact, a comprehensive report that our flagship publication Asset Analysis Focus produced at the end of last year found that there were ~750 companies with market capitalizations of over $1 billion that are not included in either the S&P 400, 500 or 600 indices and there were nearly 60

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This account publishes the weekly PRO fund manager interview, which is available only to PRO subscribers. These are interviews Seeking Alpha authors and fund managers in the industry about their investing philosophy, recent ideas they have published on Seeking Alpha and elsewhere, and their current favorite ideas. The account will also occasionally repost other interviews we have done with authors or investors.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Check with individual articles or authors mentioned for their positions. The Boyar Value Group is long MSG and GOLF. This interview does not constitute a complete description of our investment services and is for informational purposes only. It is in no way a solicitation to buy or an offer to sell any securities or investment advisory services. Any statements regarding market or other financial information is obtained from sources which we believe to be reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. All investments involve risk, including the loss of your principal investment. Past performance is no guarantee of future results and there is no assurance that any targets or forward-looking statements will be attained. This article represents the views of Boyar Asset Management as of the date of publication and may change without notice. As of March 1 2018 affiliated companies, clients and employees of Boyar Asset Management own positions in The Madison Square Garden Company, and Acushnet.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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