In this article, we will discuss the 15 Best Value Stocks to Buy According to Legendary Bill Miller.
Bill Miller is the founder, current chairman, and chief investment officer of Miller Value Partners LLC. Miller has been in the investment industry for more than three decades and has earned a reputation as one of the most successful investors of all time.
Bill Miller was born in 1950 in Laurinburg, North Carolina. He earned a degree in economics from Washington and Lee University in 1972 and an MBA from Stanford University in 1974. Miller received his CFA designation in 1986 and worked in the investment industry for more than a decade before starting his own investment management firm, Miller Value Partners LLC. The firm is based in Baltimore, Maryland, and as of Q4 2022, had a portfolio worth of over $1.5 billion.
Miller Value Partners is known for its value-based investment philosophy, which is based on the principles of value investing popularized by Benjamin Graham and Warren Buffett. The firm believes that the stock market is inefficient and frequently misprices stocks, creating opportunities for astute investors to earn high returns.
In an interview with CNBC in January 2023, Miller expressed indifference towards the ongoing volatility in the S&P 500 and reiterated his theory about investment in undervalued stocks. He believes it is up to the individual where they see value in the stock market.
He compared his investment approach with that of John Hamilton, who, back in 1939, created the Hamilton Drug Funds when Hitler invaded Poland. John borrowed $300 and made his broker purchase every stock on the New York stock exchange for a dollar or less. This went on to form the crux of the wealth he generated in the future from this trade. Many of the companies he invested in while standing on the mountain of bankruptcy fared well as an investment. This is largely similar to Bill Miller’s investment strategy, where he chooses to look for potential and the value a company can generate in the future rather than where it stands today.
Recently Miller remarked on his short trade on Tesla, Inc. (NASDAQ:TSLA). He pointed out that the company’s market cap of $380 billion (at the time of Miller’s remarks), 7-fold higher than General Motors Company (NYSE:GM), is not justified, given that Tesla, Inc. (NASDAQ:TSLA) is a car manufacturer instead of a technology firm. On the other hand, the legendary investor is bullish on Amazon.com, Inc. (NASDAQ:AMZN), General Motors Company (NYSE:GM), and has holdings in both these companies.
Our Methodology
For this list, we have picked the top 15 holdings of Miller Value Partners as of Q4 2022. We have ranked the companies in ascending order of the fund’s stake in each company.
Best Value Stocks to Buy According to Legendary Bill Miller
15. General Motors Company (NYSE:GM)
Miller Value Partners’s Stake Value: $45,037,911
Percentage of Miller Value Partners’s 13F Portfolio: 2.9%
General Motors Company (NYSE:GM) is a multinational automotive manufacturer based in the United States. The company engages in the design, production, and sale of automobiles such as cars, crossovers, trucks, and also automobile parts. General Motors Company (NYSE:GM) owns some of the most famous car brands, such as Chevrolet, Cadillac, Buick, and GMC. The company also offers auto finance solutions under the GM Financial brand, automotive parts under the GM Parts brand, and security and safety services under the OnStar brand.
On January 31, 2023, General Motors Company (NYSE:GM) reported its Q4 2022 result. The company’s revenue in the quarter stood at $43.11 billion, beating market expectations by $2.49 billion. The Normalized EPS stood at $2.12, surpassing analyst estimates by $0.44.
In its Q3 2022 investor letter, Diamond Hill Capital, an asset management firm, highlighted a few stocks and General Motors Company (NASDAQ:GM) was one of them. Here is what the fund said:
Most recently, we initiated a position in General Motors Company (NYSE:GM), one of the largest automakers in the United States. Over the past several years, GM has taken the steps necessary to focus the company on the most profitable segments and move into a position to compete in an electrified and autonomous world. With the recent rise in interest rates, there was a meaningful selloff in the auto industry, which presented us an attractive entry point to a name we know well.
14. Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH)
Miller Value Partners’s Stake Value: $46,560,751
Percentage of Miller Value Partners’s 13F Portfolio: 3%
Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) is one of the largest cruise line companies in the world. The company provides a variety of cruise tour packages ranging from 3 to 180 days. The company has a fleet of 29 ships with 61,000 available berths.
Ariel Investments had the biggest stake in Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) at the end of Q4 2022. The firm had a stake of approximately $85.3 million with a holding of 6,969,777 shares of the company.
13. Citigroup Inc. (NYSE:C)
Miller Value Partners’s Stake Value: $46,626,199
Percentage of Miller Value Partners’s 13F Portfolio: 3%
Founded in 1998, Citigroup Inc. (NYSE:C) is an American multinational investment banking and financial services corporation. The company’s operating segments comprise global consumer banking (GCB) and institutional clients group (ICG). Citigroup Inc. (NYSE:C) has five interconnected core businesses that comprise Banking, Markets, Services, US Personal Banking, and Global Wealth Management. Through the company’s global network, Citigroup Inc. (NYSE:C) is connected to almost 160 countries and conducts business in 144 currencies.
On January 13, 2023, the company reported its Q4 2022 result. The revenue for the quarter stood at $18.01 billion, beating market expectations by $3.35 million. The company’s Normalized EPS stood at $1.16, missing analysts’ expectations by $0.04.
12. JPMorgan Chase & Co. (NYSE:JPM)
Miller Value Partners’s Stake Value: $46,825,236
Percentage of Miller Value Partners’s 13F Portfolio: 3.01%
JPMorgan Chase & Co. (NYSE:JPM) is a multinational financial services corporation based in the United States. The company is considered one of the biggest financial institutions in the world. The operating segments of the company include commercial banking (CB), corporate and investment banking (CIB), consumer and community banking (CCB), and asset and wealth management (AWM).
On January 13, JPMorgan Chase & Co. (NYSE:JPM) reported its Q4 2022 result. The company’s revenue was reported at $34.55 billion, beating market expectations by $320.96 million. The Normalized EPS for the quarter stood at $3.57, beating analysts’ expectations by $0.47.
Greenhaven Associates had the biggest stake in JPMorgan Chase & Co. (NYSE:JPM) at the end of Q4 2022. The firm had a stake of approximately $643 million with a holding of 4,795,784 shares of the company.
11. Teva Pharmaceutical Industries Limited (NYSE:TEVA)
Miller Value Partners’s Stake Value: $46,940,886
Percentage of Miller Value Partners’s 13F Portfolio: 3.02%
Teva Pharmaceutical Industries Limited (NYSE:TEVA) is a multinational pharmaceutical company based in Israel. The company engages in the development, production, and marketing of branded and generic human pharmaceutical products, biopharmaceuticals, and active pharmaceutical ingredients. Teva Pharmaceutical Industries Limited (NYSE:TEVA) specializes in the areas of respiratory, migraine and headache, pain, oncology, and neurodegenerative disorders. The product portfolio of the company comprises over 3,500 different products that are available in more than 60 countries.
On February 8, 2023, Teva Pharmaceutical Industries Limited (NYSE:TEVA) reported its Q4 2022 result. The company posted revenue of $3.88 billion, missing market expectations by $21.13 million. The Normalized EPS for the quarter stood at $0.71, meeting market expectations.
10. Alibaba Group Holding Limited (NYSE:BABA)
Miller Value Partners’s Stake Value: $49,198,959
Percentage of Miller Value Partners’s 13F Portfolio: 3.17%
Headquartered in Hangzhou, China, Alibaba Group Holding Limited (NYSE:BABA) is one of the biggest e-commerce companies in the world. The company operates one of the largest online markets and offers a diverse range of product categories, including consumer electronics, apparel, automotive parts and accessories, sports and entertainment, fashion and beauty, and industrial machinery. Moreover, Alibaba Group Holding Limited (NYSE:BABA) owns several other online marketplaces, including Taobao.com, Tmall.com, Daraz.pk, AliExpress, and Lazada Group. The company also owns a full-featured marketing platform called Alimama that offers marketing services to sellers affiliated with Alibaba Group Holding Limited (NYSE:BABA).
Polen Capital made the following comment about Alibaba Group Holding Limited (NYSE:BABA) in its October investor letter:
Alibaba Group Holding Limited (NYSE:BABA) is the leading e-commerce company in China. The stock was weak over the quarter as they reported a quarterly revenue decline. The company has been heavily impacted by the continued covid-19 lockdowns throughout China and the aggressive rate increases and deteriorating outlook for China’s economy have weighed heavily on the stock. The share price has also been under pressure due to the U.S. Securities and Exchange Commission’s plans to delist Chinese tech stocks in 2024 if they do not provide access to audit files.
9. Alphabet Inc. (NASDAQ:GOOG)
Miller Value Partners’s Stake Value: $54,329,575
Percentage of Miller Value Partners’s 13F Portfolio: 3.5%
Alphabet Inc. (NASDAQ:GOOG) is a multinational conglomerate based in the United States. The company is the owner of internet media giant Google, which accounts for the majority of its revenue. Alphabet Inc. (NASDAQ: GOOG) operating segments include Google Services, which offers products such as Google Search Engine, Gmail, Google Drive, Google Play, and YouTube. The Google Cloud segment offers cybersecurity, analytics, machine learning, and related services and other bets segment that comprises eight companies whose services range from life science to self-driving.
On February 2, 2023, Alphabet Inc. (NASDAQ: GOOG) reported its Q4 2022 result. The company’s reported revenue for the quarter stood at $76.06 billion, missing market expectations by $440.85 million. The Normalized EPS for the quarter was reported at $1.05, missing market expectations by $0.15.
Diamond Hill Large Cap Strategy made the following comment about Alphabet Inc. (NASDAQ:GOOG) in its Q4 2022 investor letter:
Other bottom contributors included media and technology giant Alphabet Inc. (NASDAQ:GOOG), apparel and footwear company V.F. Corporation and utility operator Dominion Energy. We believe Alphabet’s shares underperformed on concerns of a weakening macroeconomic environment. The company also reported weaker-than-expected earnings and revenue for Q3 2022. Longer-term, we expect Alphabet’s search engine advertising, YouTube advertising and other initiatives to continue driving revenue growth. As such, we used the share price weakness this quarter to add to our position.
8. Delta Air Lines, Inc. (NYSE:DAL)
Miller Value Partners’s Stake Value: $55,127,935
Percentage of Miller Value Partners’s 13F Portfolio: 3.55%
Founded in 1925, Delta Air Lines, Inc. (NYSE:DAL) is among the world’s largest airlines. With a network of over 300 destinations in more than 50 countries, the company provides air transportation services. The company also offers maintenance for aircraft, engineering support, overhaul and repair services, and aircraft charters. Delta Air Lines, Inc. (NYSE:DAL) has a fleet of more than 1,200 aircraft that include Airbus, Boeing, Bombardier, and Embraer.
On January 13, 2023, Delta Air Lines, Inc. (NYSE:DAL) reported its Q4 2022 result. The revenue of Delta Air Lines, Inc. (NYSE:DAL) stood at $13.44 billion, beating market expectations by $835.00 million. The Normalized EPS of the company was reported at $1.48, beating market expectations by $0.16.
At the end of Q4 2022, Citadel Investment Group had the highest stake in Delta Air Lines, Inc. (NYSE:DAL), with a holding of 7,129,279 shares.
7. Amazon.com, Inc. (NASDAQ:AMZN)
Miller Value Partners’s Stake Value: $56,409,428
Percentage of Miller Value Partners’s 13F Portfolio: 3.63%
Amazon.com, Inc. (NASDAQ:AMZN) is among the biggest online retailers in the world. The company offers products from almost every category, including electronics, computers, household, kitchen, outdoor, entertainment, fashion and accessories, self-care, health care, etc. These products are sold by third-party sellers through the company’s platform. The company also offers platforms such as Amazon Prime Video and Twitch to filmmakers, content creators, musicians, authors, etc., to publish and commercialize their content. Amazon.com, Inc. (NASDAQ:AMZN) also owns more than 100 private-label brands that offer products from the categories of food and beverage, clothing, automotive, electronics, etc.
On February 2, 2023, Amazon.com, Inc. (NASDAQ:AMZN) reported its Q4 2022 result. The company’s revenue during the quarter was reported at $149.20 billion, beating market expectations by $3.43 billion. The Normalized EPS stood at $0.03, missing analysts’ expectations by $0.14.
Diamond Hill Large Cap Strategy made the following comment about Amazon.com, Inc. (NASDAQ:AMZN) in its Q4 2022 investor letter:
At Amazon.com, Inc. (NASDAQ:AMZN), recessionary and inflationary headwinds drove weaker demand and higher costs for its AWS (Amazon Web Services) and retail businesses. While overinvestment in the retail business during the pandemic and continued growth of investments in AWS could lead to near-term pressure on profitability, we believe Amazon’s competitive advantages will continue to grow and that the business has the potential to grow much faster than the overall economy in the coming years.
6. Energy Transfer LP (NYSE:ET)
Miller Value Partners’s Stake Value: $59,312,918
Percentage of Miller Value Partners’s 13F Portfolio: 3.82%
Energy Transfer LP (NYSE:ET) is an energy company that engages in the transportation and storage of oil, natural gas, natural gas liquids (NGLs), and refined products. The company owns and operates approximately 12,000 miles of pipeline network across 41 states to transport oil and gas.
On February 15, 2023, the company reported its Q4 2022 result. The company’s revenue stood at $20.50 billion, missing market expectations by $3.31 billion. The Normalized EPS for the quarter was reported at $0.34, beating estimates by $0.02.
Abrams Capital Management had the biggest stake in Energy Transfer LP (NYSE:ET) at the end of Q4 2022. The firm had a stake of approximately $211 million with a holding of 17,834,322 shares of the company.
5. Mattel, Inc. (NASDAQ:MAT)
Miller Value Partners’s Stake Value: $59,909,503
Percentage of Miller Value Partners’s 13F Portfolio: 3.86%
Founded in 1945, Mattel, Inc. (NASDAQ:MAT) is an American toy manufacturing company. The company engages in the design, production, and marketing of toys globally. The company’s product line includes dolls, action cars, baby toys and gears, and toys for toddlers and preschool kids. Mattel, Inc. (NASDAQ:MAT) owns some of the most well-known toy brands in the world, including Barbie, Hot Wheels, American Girl, and Fisher-Price. The company is present in 35 locations around the world and sells its products in more than 150 countries.
On February 8, 2023, Mattel, Inc. (NASDAQ:MAT) reported its Q4 2022 result. The company’s revenue stood at $1.40 billion, missing market expectations by $278.08 million. The Normalized EPS of the company stood at $0.18, missing market expectations by $0.11.
4. Taylor Morrison Home Corporation (NYSE:TMHC)
Miller Value Partners’s Stake Value: $65,292,562
Percentage of Miller Value Partners’s 13F Portfolio: 4.21%
Founded in 2007, Taylor Morrison Home Corporation (NYSE:TMHC) is a home construction company. The company is among the largest home-building companies in the United States. Taylor Morrison Home Corporation (NYSE:TMHC) engages in designing, building, and selling single and multi-family attached and detached houses and also develops lands that include lifestyle and master-planned communities. The company owns several brands, including Taylor Morrison, Darling Homes, and William Lyon Signature.
On February 15, 2023, Taylor Morrison Home Corporation (NYSE:TMHC) reported its Q4 2022 result. The revenue of Taylor Morrison Home Corporation (NYSE:TMHC) was reported at $2.49 billion, beating market expectations by $169.25 million. The Normalized EPS of the company stood at $2.93, beating market expectations by $0.16.
3. Expedia Group, Inc. (NASDAQ:EXPE)
Miller Value Partners’s Stake Value: $68,967,559
Percentage of Miller Value Partners’s 13F Portfolio: 4.44%
Expedia Group, Inc. (NASDAQ:EXPE) is among the world’s largest online travel agencies. The company provides a one-stop solution for travelers to book from a wide selection of vacation packages, flights, hotels, activities, rentals, car rentals, cruises, and attractions and services. These services are offered through a number of brands and branded websites such as hotels.com, Vrbo.com, Hotwire.com, Travelocity.com, ebookers.com, Trivago N.V, CarRentals.com, and Orbitz.com.
2. OneMain Holdings, Inc. (NYSE:OMF)
Miller Value Partners’s Stake Value: $69,943,172
Percentage of Miller Value Partners’s 13F Portfolio: 4.5%
OneMain Holdings, Inc. (NYSE:OMF) is a financial service holding corporation that engages in the insurance business and consumer finance in the US. The services offered by the company include personal loans, auto loans, servicing loans, credit and non-credit insurance, and the purchase and sale of businesses and assets. OneMain Holdings, Inc. (NYSE:OMF) operates approximately 1,400 branches in 44 states.
On February 7, 2023, OneMain Holdings, Inc. (NYSE:OMF) reported its Q4 2022 result. The reported revenue was $1.06 billion, beating market expectations by $2.85 million. The company’s Normalized EPS stood at $1.56, beating market expectations by $0.05.
1. Ovintiv Inc. (NYSE: OVV)
Miller Value Partners’s Stake Value: $74,007,409
Percentage of Miller Value Partners’s 13F Portfolio: 4.77%
Founded in 2002, Ovintiv Inc. (NYSE:OVV) is an oil and gas company that produces and markets oil, natural gas, and natural gas liquids. The company’s multi-basin portfolio includes Anadarko Basin in West-Central Oklahoma, the Permian basin in Texas, and Montney in Western Canada. Other assets of Ovintiv Inc. (NYSE:OVV) include Bakken, which is a multi-bench oil resource in North Dakota; and the Uinta basin in Utah. The operating segments of the company comprise the US operations, the Canadian operations, and Market Optimization.
In its Q2 2022 investor letter, Carillon Tower Advisers, an asset management firm, highlighted a few stocks and Ovintiv Inc. (NYSE:OVV) was one of them. Here is what the fund said:
Oil and gas exploration and production company Ovintiv Inc. (NYSE:OVV) fell as oil prices faded late in the quarter due to aggressive Fed rate hikes and growing credit fears in emerging markets, a source of demand growth for oil. Although oil and fuel product inventories remain scarce, the Fed has been so aggressive with rhetoric and tightening that the dollar rose sharply and investor sentiment shifted toward anticipating a recession. Ovintiv is a self-help improvement story as it lowers debt levels through cash generation and asset sales while detailing plans to buy back shares more aggressively and pay a higher dividend.
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Disclosure: None. 15 Best Value Stocks to Buy According to Legendary Bill Miller is originally published on Insider Monkey.
