Value Investor Bill Miller’s Top 5 Stock Picks

2. Farfetch Limited (NYSE: FTCH)

Bill Miller has made substantial gains through his investments in Farfetch Limited (NYSE: FTCH). The firm first initiated a position in Farfetch during the fourth quarter of 2019 and sold out 66% of stake during the December quarter of 2020 to capitalize on a more than 480% share price rally. Despite that, Farfetch Limited is the second-largest stock holding of Miller Value Partners 13F portfolio, according to the latest filings.

In its Q4 investor letter, Miller Value Partners stated reasons for the significant share price gains of Farfetch stock price in 2020. Here is what Miller Value Partners said:

“Farfetch Ltd. (FTCH) continued its climb in the quarter, returning 152.7%. The company really took off following the announcement of a landmark global partnership with Alibaba, Richemont & Artemis. The deal gives FTCH access to Alibaba’s platform and its 757M customers while also starting new relationships with Richemont’s brands. The agreement will provide an infusion of $1.15B from their new partners to help them grow out the platform in China and beyond and aligning the incentives of all parties. Later in the quarter, Alibaba’s President Michael Evans joined the board of directors. The company also announced another strong earnings report. For the 3rd quarter, the company posted revenue of $437.7M versus consensus estimates of $369.8M. Gross Margins were above expectations at 48% against estimates of 45%. The result was the company had an Earnings Before Income, Taxes, Depreciation, and Amortization (EBITDA) loss of just $10M, versus expectations for a $22M EBITDA loss in the quarter. Gross merchandise value also beat expectations coming in up 60% versus expectations for 40-45%. The company guided to EBITDA profitability in the fourth quarter ahead of expectations.”