In this post we will take a look at legendary value investor Bill Miller’s portfolio: Top 5 stock picks. For more details about Mr. Miller, his hedge fund, its investment strategy and more stocks in its portfolio, head on over to Legendary Value Investor Bill Miller’s Portfolio: Top 10 Stock Picks.
5. Meta Platforms, Inc. (NASDAQ:FB)
Miller Value Partners’ Stake Value: $101.7 million
Percentage of Miller Value Partners’ 13F Portfolio: 2.35%
Number of Hedge Fund Holders: 248
Meta Platforms, Inc. (NASDAQ:FB) earned $29 billion in revenue and $3.22 in GAAP EPS for its Q3, beating estimates for EPS only. UBS increased the company’s price target to $425 from $416 in December 2021, outlining that advertisement and other spending budgets for the company’s customers will increase soon.
Mr. Miller’s hedge fund owned 299,560 Meta Platforms, Inc. (NASDAQ:FB) shares during Q3 2021 which were worth $101 million and represented 2.35% of its portfolio. 248 of the 867 hedge funds part of Insider Monkey’s third quarter of 2021 survey owned stakes in the communications company.
Ken Fisher’s Fisher Asset Management is Meta Platforms, Inc. (NASDAQ:FB) largest investor. It owns 7.5 million shares worth $2.5 billion.
Jefferies Group mentioned Meta Platforms, Inc. (NASDAQ:FB) in its Q3 2021 investor letter. It stated that:
“While still early, FB is in the process of building the platforms that will ultimately support the development of the Metaverse. We look at FB’s position through the lens of 4 current investment initiatives: 1) Oculus VR hardware, 2) Smart glasses, 3) Augmented Reality lenses, and 4) “Horizon Workrooms”
Oculus Virtual Reality hardware: Since acquiring Oculus in 2014 ($2B deal), FB has been focused on developing best-in-class hardware and complementary software & services to support VR experiences. The Oculus Quest 2 is FB’s newest VR headset; it retails at $299 and allows users to play games, try fitness classes, play sports, and watch concerts in virtual environments. Most importantly, Quest 2 is linked to users’ Facebook accounts, which means users can seamlessly connect with friends in virtual environments to play games or spend time together. We believe one of FB’s biggest differentiators in VR is its large array of non-gaming experiences that were designed for Oculus. For instance, users can explore extreme terrain in National Geographic Explore VR, join virtual fitness classes, or simulate being a chef. As FB’s hardware continues to improve and becomes less cumbersome, we would expect a flywheel of greater developer and user adoption of VR…”
4. Alphabet Inc. (NASDAQ:GOOG)
Miller Value Partners’ Stake Value: $106.5 million
Percentage of Miller Value Partners’ 13F Portfolio: 2.46%
Number of Hedge Fund Holders: 156
During Q3 2021, Mr. Miller’s hedge fund owned 39,833 Alphabet Inc. (NASDAQ:GOOG) shares which were worth $106 million in a stake constituting 2.46% of its portfolio. Out of 867 hedge funds part of Insider Monkey’s Q3 2021 survey, 156 owned the company’s shares.
Morgan Stanley raised the company’s price target to $3,200 from $3,000 in November 2021, outlining that improved spending should serve the company well. Alphabet Inc. (NASDAQ:GOOG) roared back to life in its third fiscal quarter, by posting a 41% annual revenue growth through bringing in $65 billion in the metric. Its revenue and $27.99 GAAP EPS beat analyst estimates for both.
Alphabet Inc. (NASDAQ:GOOG)’s largest investor according to Insider Monkey’s research is Chris Hohn’s TCI Fund Management who owns 2.9 million shares worth $7.8 billion.
Giverny Capital mentioned Alphabet Inc. (NASDAQ:GOOG) in its Q3 2021 investor letter. It outlined that:
“During the quarter we trimmed two positions, (which includes) Alphabet, after significant run-ups. Alphabet remains our largest holding at a 9% weight. When it rose above a 10% weight in late July, we brought it down a bit. I won’t automatically trim a position when it reaches the 10% threshold, but Alphabet nearly doubled from the summer of 2020 to 2021 and it felt responsible to take some gains.”
3. Splunk Inc. (NASDAQ:SPLK)
Miller Value Partners’ Stake Value: $109.2 million
Percentage of Miller Value Partners’ 13F Portfolio: 2.53%
Number of Hedge Fund Holders: 47
Splunk Inc. (NASDAQ:SPLK) is a cloud services provider whose products allow their customers to use large volumes of data for generating insights and managing their affairs. The company is headquartered in San Francisco, California.
Miller Value Partners held 754,847 Splunk Inc. (NASDAQ:SPLK) shares during the third quarter of this year. This stake was worth $109 million and represented 2.53% of its portfolio. 47 of the 867 hedge funds part of Insider Monkey’s research for the same time period owned the company’s shares.
Splunk Inc. (NASDAQ:SPLK)’s largest investor is Brandon Haley’s Holocene Advisors who owns 1.3 million shares worth $196 million.
Splunk Inc. (NASDAQ:SPLK) raked in $665 million in revenue and -$0.37 in non GAAP EPS for its fiscal Q3, beating analyst estimates for both. RBC Capital lowered the company’s price target to $190 from $210 in December 2021, stating that the stock has long-term growth potential.
In its Q2 2021 investor letter, Mr. Miller’s hedge fund had the following to say about Splunk Inc. (NASDAQ:SPLK):
“Our largest new position is Splunk Inc. (SPLK$138.373). Splunk typifies one of our favorite types of opportunities: a company well positioned secularly that is facing short-term business pressures. We believe there’s the opportunity to profit as the business normalizes and then compound capital beyond that. SPLK is a leading provider of security software, a growing market due to exploding cyber threats.
Splunk is in the middle of a multi-year business model transition that has negatively impacted financials and increased uncertainty. We believe we are finally past the worst of the transition with revenues troughing in FY2020. We expect the company to return to positive free cash flow generation in the second half of this year.
SPLK trades at half the multiple of comparables. We believe that gap will close as the market gets more certainty that the transition is working. The stock recently jumped on the announcement that Silver Lake, an excellent tech investor, invested $1B in a convertible senior note and the company announced a $1B repurchase authorization. We believe the stock is worth well more than its old high (~$2204) creating significant upside potential for those patient enough to hold through the transition.”
2. DXC Technology Company (NYSE:DXC)
Miller Value Partners’ Stake Value: $117.95 million
Percentage of Miller Value Partners’ 13F Portfolio: 2.73%
Number of Hedge Fund Holders: 33
DXC Technology Company (NYSE:DXC) is an American IT services provider with a global presence. Its products let its customers gain insights from their daily operations and allow them to digitally transform their operations.
BMO Capital lowered the IT company’s price target to $45 from $50 in November 2021 sharing that weak bookings and strong income statement metrics painted a mixed picture for the company. For its fiscal Q2, DXC Technology Company (NYSE:DXC) posted revenue of $4 billion and EPS of $0.9, missing estimates for revenue.
Mr. Miller’s hedge fund owned 3.5 million DXC Technology Company (NYSE:DXC) shares as of Q3 2021 end. These were worth $117 million and represented 2.73% of its portfolio. 33 of the 867 hedge funds part of Insider Monkey’s survey for the same time period owned the company’s shares.
DXC Technology Company (NYSE:DXC)’s largest investor is Natixis Global Asset Management’s Harris Associates who owns 10.7 million shares worth $360 million.
Miller Value Partners mentioned the firm in its Q2 2021 investor letter outlining that:
“DXC Technology Company (DXC) continued to climb higher during the quarter gaining 24.57%. The company reported solid Fiscal Year 4th quarter (FY4Q) results with revenue of $4.385B beating consensus of $4.29B and earnings per share (EPS) of $0.74 ahead of expectations for $0.70. The company guided for fiscal 2022 revenue of $16.6-$16.8B, below the Street at $16.9B and adjusted EPS of $3.45-3.65, ahead of the consensus of $3.43. By FY2024, the company expects organic revenue growth of 1-3%, adjusted earnings before income and taxes (EBIT) margin of 10-11%, adjusted diluted EPS of $5.00-$5.25 and free cash flow (FCF) of $1.5B. Later in the month, the company held an investor day where management highlighted their confidence that they can hit all of their targets while also stressing the progress they have made on their turnaround to date.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Miller Value Partners’ Stake Value: $119.1 million
Percentage of Miller Value Partners’ 13F Portfolio: 2.76%
Number of Hedge Fund Holders: 242
Miller Value Partners owned 36,254 Amazon.com, Inc. (NASDAQ:AMZN) shares during the third quarter of this year. This stake was worth $119 million and represented 2.76% of its portfolio. 242 of the 867 hedge funds surveyed by Insider Monkey during the same time period owned the company’s shares.
For its fiscal Q3, Amazon.com, Inc. (NASDAQ:AMZN) disappointed Wall Street for its revenue and GAAP EPS, by missing estimates for both and posting $110 billion and $6.12 in the segments, respectively. Cowen raised the company’s price target to $4,500 in December 2021, stating that growth should accelerate next year.
Ken Fisher’s Fisher Asset Management is Amazon.com, Inc. (NASDAQ:AMZN)’s largest investor according to Insider Monkey’s research. It has a $6.3 billion stake via 1.9 million shares.
Polen Capital mentioned Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2021 investor letter, outlining that:
“Amazon has also lagged as its revenue growth is slowing on the very difficult comparisons from last year when this behemoth was growing revenue by over 40%. We still expect exceptional long-term growth and significant margin expansion as the fastest growing (and now large) segments of Amazon are also generating the highest margins.”
You can also take a peek at the 10 Best Stocks for Dividends and 10 Cloud Computing Stocks to Buy According to Cathie Wood.
