Bill Miller, the chairman and CEO of LMM, is a legendary investor who was particularly popular on Wall Street in the 1990s, as he managed to outperform the market every year between 1991 and 2005, a rather difficult achievement for an investor. However, due to the financial crisis, his fund, Legg Mason Opportunity Trust, incurred huge losses between 2007 and 2011, followed by two years of above-the-market gains. In 2014 and 2015, Miller’s fund went back to underperforming the benchmarks and, in 2016, Miller left Legg Mason, a company where he had worked since 1981. Nevertheless, Miller, who went on to found LMM, remains one of the most followed investors.
Last week, Miller was hosted by CNBC’s Squawk Box team, where he provided his take on several stocks, including Apple Inc. (NASDAQ:AAPL), Intrexon Corp (NYSE:XON), Fiat Chrysler Automobiles NV (NYSE:FCAU), and OneMain Holdings Inc (NYSE:OMF).
Miller believes that Apple Inc. (NASDAQ:AAPL) is a “cheap” stock and it is one of his largest holdings, although its large market capitalization means the stock doesn’t have a lot of room “to move the needle.”
“Apple’s a consumer brand with freedom to price. And that’s worth a whole lot more than 12 times earnings. And of course $250 billion of cash sitting there as well,” Miller said.
Moreover, the investor thinks that Apple Inc. (NASDAQ:AAPL) is one of several companies that can reach a $1 trillion valuation, although Amazon.com, Inc. (NASDAQ:AMZN) might get there faster. The company’s size also suggests that it is unlikely that it will do an M&A deal that will be large enough to create any shareholder value risk. According to LMM’s latest 13F, Miller’s fund had 8,580 shares of Apple at the end of September, as well as ‘Call’ options underlying some 3.54 million shares. Overall, 145 funds tracked by Insider Monkey were bullish on Apple Inc. (NASDAQ:AAPL) heading into the fourth quarter of 2016, up by 29 funds over the quarter.
Intrexon Corp (NYSE:XON) is another company that Miller is fond of, with LMM holding some 3.07 million shares worth $86.16 million as of the end of the third quarter of 2016. Miller is bullish on Intrexon because of its “portfolio of options”, with products that are about to hit the market in the near future, including a topical capable of painless tattoo removal. However, Intrexon Corp (NYSE:XON)’s stock has plunged by over 39% in the last 12 months and, overall, it does not seem to be very popular among smart money investors, with just 10 funds from our database long the stock at the end of September, compared to 16 funds a quarter earlier.
On the next page, we are going to take a look at Miller’s take on his top automotive pick, as well as his opinion about the housing market.