The search for hidden assets or their low valuation are some of the keys that Jonathan Boyar, the American value investor, will discuss at Substrate AI's annual event, which will also include a round table with the company's executives in the run-up to its IPO.
The search for hidden assets, the big franchises behind unknown company names, their low valuation, that they are fallen angels, that they face special situations and that they have some kind of catalyst are the six keys to finding great investment opportunities in the markets, according to American investor Jonathan Boyar, a benchmark in value investing, who is participating in Substrate AI's annual event on November 4.
Search for hidden assets
The head of The Boyar Value Group, a firm founded by his father in 1975, emphasizes that many times the accounting of companies hides jewels, such as assets that are hidden from the eyes of experts and that with curiosity, patience and study show that the company has much more value.
Boyar's thesis also supports the advantages of investing in large franchises hidden in companies unknown to most of society. The U.S. investor gives a very illustrative example with the purchase of Stokely-Van Camp, dedicated to the bean business but which owned the Gatorade brand, which was worth considerably more than the entire value of the company.
Putting the magnifying glass on valuation
Very negative events create great investment opportunities. When an industry falls out of favor with Wall Street, as happened with the pharmaceutical industry in 1992, companies fall further in the stock market than a buyer would be willing to pay, creating opportunities for the most patient.
This situation is similar to that suffered by the so-called "fallen angels", which are those companies that were very successful in the past and have lost the charm and favor of investors, which has caused their price to plummet. In this scenario, aggressive behavior takes place and many opportunities arise.
Spin-offs and companies emerging from bankruptcy are for Boyar a source of opportunity as long as they are valued correctly. Moreover, in the case of spin-offs, they enjoy little coverage by analyst firms, which means that many shareholders of these newly listed companies may be forced to sell, putting pressure on the price below their real value.
Boyar Value Group highlights a number of catalysts in listed companies such as the initiation of dividend payments or share buyback programs that demonstrate a healthy balance sheet; potential spin-offs that make economic sense and create value; acquisitions and changes in control of companies.
It is precisely the right investment decisions that led Mapfre's fund manager to launch a fund, the Mapfre US Forgotten Value, which invests in the companies that Boyar locates. In addition, its Forgotten 40 study, which puts forward theses for 40 companies that will outperform their benchmark over the next year, beats the market handsomely, as over ten years its annualized return exceeds the S&P 500 by more than one percentage point (6% vs. 4.7%).
Substrate AI Annual Event
In this context, as a benchmark of this investment philosophy and as a collaborator of the financial area of Substrate AI for years, Jonathan Boyar will participate on November 4 in the third annual event of the firm, the first to be held after its commitment to artificial intelligence and its corporate merger with the former Zonavalue. The American investor will give a master class in which he will address the main premises of value investing and the opportunities offered by small caps in the technology sector.
The event will also include a round table debate with the participation of Lorenzo Serratosa, president of Substrate AI; José Iván García, CEO of the company; and Christopher Dembik, who recently joined the company's Board after being an advisor to Emmanuel Macron's economic program. Topics such as the company's commitment to artificial intelligence, its implementation in the financial world and its imminent IPO will be discussed.
The meeting is part of its training and financial advisory verticals, areas that it intends to promote with the application of its artificial intelligence technology to stock market investment strategies and through its AI assistant for training. Substrate AI has, through Zonavalue and Intefi, more than 30,000 users in Spain and Latin America with interest in these fields.
*The annual Substrate AI event was held on November 4th at 7:00 pm at the Rafael del Pino Auditorium (39A Rafael Calvo Street).