Bill Miller Portfolio: 5 Picks From Legendary Value Investor

3. OneMain Holdings, Inc. (NYSE:OMF)

Number of Hedge Fund Holders: 26

Miller Value Partners’ Stake Value: $7,938,473

OneMain Holdings, Inc. (NYSE:OMF) is a financial services holding company involved in consumer finance and insurance. The company provides personal loans secured by collateral, credit cards, and insurance products, including life, disability, and unemployment insurance, as well as asset protection coverage and membership plans. At the end of June 2023, Bill Miller’s hedge fund shed 92% of its stake in OneMain Holdings, Inc. (NYSE:OMF). Still, with a position worth nearly $8 million, it remains one of Miller’s top stocks. 

On October 13, OneMain Holdings, Inc. (NYSE:OMF) filed an SEC document announcing its intention to offer different financial instruments, including common stock, preferred stock, depositary shares, debt securities, warrants, stock purchase contracts, and stock purchase units.

According to Insider Monkey’s second quarter database, 26 hedge funds were bullish on OneMain Holdings, Inc. (NYSE:OMF), compared to 33 funds in the last quarter. Glenn Greenberg’s Brave Warrior Capital is the largest stakeholder of the company, with 5.35 million shares worth $233.8 million. 

Miller Value Partners Income Strategy made the following comment about OneMain Holdings, Inc. (NYSE:OMF) in its second quarter 2023 investor letter:

“OneMain Holdings, Inc. (NYSE:OMF) was another top performer during the quarter. The company reported 1Q23 Adjusted EPS of $1.46, compared to 1Q22 EPS of $2.35, below consensus of $1.65, and a net charge-offs ratio of 7.72%, +214bps Y/Y (+84bps sequentially), above consensus of 7.6%. Consumer & Insurance (C&I) capital generation for the quarter came in at $179MM, compared to $282MM in 1Q22, while managed receivables rose 5.8% Y/Y (-0.5% sequentially) to $20.6B with a loan portfolio yield of 22.3%. Personal loan originations totaled $2.8B in 1Q23, down 5% from $3.0B in 1Q22. The company maintained a quarterly dividend of $1/share, or an annualized yield of ~9.2%, and repurchased 683K shares for $27MM (0.5% of market cap) during the quarter. As of quarter-end, the company’s net leverage ratio stood at 5.4x, compared to 5.5x at the end of 4Q22. Management indicated that post-tightening originations now represent 38% of the company’s receivables (vs. 27% in 4Q22) and are expected to represent 65-70% of receivables by YE23.”