Bill Miller, chief investment officer of Miller Value Partners, revealed in a Tuesday CNBC interview that his firm discarded its holding in GameStop Corp. (GME, Financial) during the stock's short-squeeze frenzy in late January.
While working at Legg Mason Inc. (LM, Financial), the legendary value investor managed a fund that outperformed the Standard & Poor's 500 index benchmark for 15 consecutive years. Miller's Baltimore-based firm seeks long-term capital appreciation using a value approach based on both internal research and external research.
Investor sells GameStop prior to the short squeeze, distancing from Reddit-fueled meme stocks
Miller said in a "CNBC Exchange" interview that his firm had GameStop in its Deep Value Strategy product and that the cost of the position was approximately $4. The investor further added that the firm sold the shares at approximately $70 before the stock expanded to $400.
Shares of the Grapevine, Texas-based video game retailer closed at $158.53, down 3.55% from Monday's close of $164.37 but over 30 times its April 21, 2020, price of $4.78 and over 16 times its GF Value of $9.57.
Miller warned that his firm is uninterested in the so-called meme stocks, saying that such stocks are "in the grip of the Reddit crowd" and thus, the firm is "not able to analyze" such companies normally because the price is dominating the fundamentals.
GuruFocus ranks GameStop's financial strength 5 out of 10: Although the game retailer has a strong Altman Z-score of 5.31, GameStop's equity-to-asset and debt-to-equity ratios underperform over 82% of global competitors.
Investor highlights a few of his firm's top holdings
Miller said that the market is "fairly valued" according to his prospective although stocks may still be "expensive" in the short term. The investor highlighted a few of his firm's top 10 holdings, including Farfetch Ltd. (FTCH, Financial) and Desktop Metal Inc. (DM, Financial).
The following video gives highlights of Miller's interview with CNBC.
Disclosure: No positions.
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