Below are Bill Miller’s top 5 stock picks. To read our analysis of Bill Miller’s investment philosophy and his thoughts on Bitcoin, go to Value Investor Bill Miller’s Top 10 Stock Picks.
5. Desktop Metal Inc (NYSE: DM)
Bill Miller’s stock-picking strategy also worked in the case of Desktop Metal Inc (NYSE: DM). The firm initiated a position in Desktop Metal during the third quarter and increased the stake by 323% in the December quarter, making it the fifth-largest stock holding of the 13F portfolio.
In its Q4 investor letter, the Miller Value Partners highlighted the reasons for their higher stake in Desktop Metals. Here’s what the hedge fund said:
“Desktop Metal is a name that made it into our top holdings at the end of year due to strong performance since our purchase at the end of the third quarter. The company is a second-generation industrial printing company led by a great team. It came public through a merger with a SPAC led by Leo Hindery, Jr. who we’ve known from his successful history at Telecommunications, Inc (TCI) where they excelled at capital allocation. One of the unique benefits of structure is that it helps us get access to unique opportunities. Here, we were able to invest in the PIPE (private investment in public equity) to take the company public based on industry relationships.
Desktop Metal is early in its commercialization, but we think the company has great potential over the next five years with a stellar list of customer partners and potential applications. We bought on the deal at a $1.8B enterprise value or 6.7x the EBITDA management estimates it can earn in 5 years before any acquisitions. For a company capable of growing at such high rates (triple digits for next couple years), with a great business with high moats and a fantastic team, this was a great deal. It’s doubled since the deal. This is a great example of an undervalued, long-term, growth-oriented opportunity that we were still able to source in this market.”