Brian Boyle on Portfolio Strategy and His Best Ideas

We recently had the pleasure of interviewing Brian Boyle, CEO and CIO of Boyle Capital, a research-driven investment management firm founded in 2004. The firm is based in Clive, Iowa and specializes in value equity strategies.

Brian has been in the investment industry since 2000. Prior to founding Boyle Capital in 2004, he was a portfolio manager for DCM. Brian has managed a broad number of mandates including high net worth individuals, institutional pension plans, private funds and a public mutual fund. Over the past decade, he has generated market-beating returns by employing a deep value concentrated approach to investment selection.

MOI Global: Please tell us about your background and the genesis of your firm. What motivated you to set up Boyle Capital and what operating principles have guided you since then?

Brian Boyle: I graduated with a degree in Finance and Economics from the University of Northern Iowa. After a couple of years as a portfolio manager, I struck out on my own and started Boyle Capital in 2004. We are 100% employee owned and today we manage around $120 million. Our strategy is heavily influenced by the works of Buffett, Ben Graham and Phil Fisher. That is, we try to act like owners. We only focus on a handful of companies and we only invest when we believe there is significant margin of safety against a permanent loss in capital. This is the way I ran my own money prior to starting the firm in 2004 and the last eight years have really been a continuation of that. One of my major goals when starting Boyle Capital was to become personally wealthy from the investments we make. As such, nearly all of my net worth is in the same stocks as clients.

MOI: How do you generate investment ideas?

Boyle: We really don’t have a rigid process or use screens to generate ideas. However, there is usually a common linkage among our investments. For example, Fairfax Financial has been a major holding for years, which led us to Sandridge Energy. We owned Canadian Oil Sands Trust in the past because of Seymour Schulich. Likewise, when he became a significant investor in Birchcliff Energy we took notice. We also study the investments of other great investors. I have files on over 50 other investors that we respect, so we look at what others have been doing to see if anything might be interesting. At the end of the day, you must do your own homework though.

MOI: What are your key stock selection criteria, and what types of businesses have you favored historically?

Boyle: We generally focus on a few key principles. One, we look for companies generating or holding a lot of cash. Two, they have to be run by smart, honest people with a great paper trail of success that have a lot of skin in the game. Lastly, we have to be able to buy at prices where we believe the odds of having to take a permanent loss are limited.

We really don’t favor any single type of business or sector. We are opportunistic in that we try to go wherever we see the best opportunities with the least risk. Today, we think those opportunities are in the natural gas and financial services space. As such, we are heavily focused in those two areas at the present.

MOI: How do you assess the quality and incentives of management, and what CEOs do you admire most?

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