Bill Miller, who once beat the S&P 500 index for 15 consecutive years, has seen his hedge fund soar 46% in the first half, Bloomberg reported this week.
The hedge fund he founded about three years ago made most of the returns on investments in bitcoin (BTC, Financial). The cryptocurrency surged about 205% in the first half of the year. Miller, a bitcoin enthusiast, is also the founder and chief investment officer of Acunari, an international investment company focused on the currency, which it calls “digital gold.”
The hedge fund’s other largest positions were Amazon (AMZN, Financial), ADT (ADT, Financial) and Avon Products (AVP, Financial), Bloomberg reported.
In addition to his hedge fund, Miller manages mutual funds at his firm, Miller Value Partners (Trades, Portfolio), which he founded after leaving Legg Mason Capital Management in 2016. The contrarian firm seeks mispriced stocks and holds for the long term.
In early July, Miller alluded to Warren Buffett (Trades, Portfolio)’s comments at the Berkshire Hathaway (BRK.A, Financial)(BRK.B, Financial) when he said “stocks are very cheap compared to bonds.”
“The best reaction to Fed rate cuts would be a steadily rising 10-year yield which would signal both expectations of faster growth but also inflation that was headed in the direction of the Fed’s long-held target of 2%. A steepening yield curve would be quite bullish for equities,” he wrote in a second-quarter letter. “The path of least resistance for stocks remains higher.”
Year-to-date, 12 out of Miller Value Partner’s 13 largest positions have positive returns. The best performer, sixth-largest position Avon Products Inc. (AVP, Financial), soared 152.6%. His five largest positions are: Amazon.com Inc. (AMZN, Financial), Bausch Health Companies Inc. (BHC, Financial), OneMain Holdings Inc. (OMF, Financial), RH (RH, Financial) and Brighthouse Financial Inc. (BHF, Financial).
Amazon.com Inc. (AMZN, Financial)
Year to date, Amazon.com Inc. has gained 31.4%. Miller Value Partners (Trades, Portfolio) held 76,736 shares of Amazon.com Inc., giving it 5.45% equity portfolio weight. He incrementally reduced the position over most quarters since the second of 2017.
Amazon.com Inc. has a market cap of $956.63 billion; its shares were traded around $1,943.05 Friday with a price-earnings ratio of 81.11 and price-sales ratio of 4.01. Amazon.com Inc. had an annual average earnings growth of 33.8% over the past 10 years. GuruFocus rated Amazon.com Inc. the business predictability rank of 4-star.
Bausch Health Companies Inc. (BHC, Financial)
Formerly Valeant Pharmaceuticals, Bausch Health Companies returned 27.3% year to date. At first quarter-end, Miller Value Partners (Trades, Portfolio) held 4,773,149 shares of the company after trimming the position by about 3% over the past two quarters. The holding represents 4.7% of the equity portfolio.
Bausch Health Companies Inc. has a market cap of $8.4 billion; its shares were traded around $23.81 Friday with and price-sales ratio of 1.02. Bausch Health Companies Inc. had an annual average earnings growth of 17.5% over the past 10 years. GuruFocus rated Bausch Health Companies Inc. the business predictability rank of 3.5-star.
OneMain Holdings Inc. (OMF, Financial)
Year to date, OneMain Holdings Inc. rose 47.2%. At first quarter-end, Miller Value Partners (Trades, Portfolio) held 3,176,760 shares of the company after reducing it by 0.31% during the quarter. The holding represents 4.02% of the equity portfolio.
OneMain Holdings Inc. has a market cap of $4.9 billion; its shares were traded around $35.98 Friday with a price-earnings ratio of 10.26 and price-sales ratio of 1.34. The trailing 12-month dividend yield of OneMain Holdings Inc. is 1.40%. The forward dividend yield of OneMain Holdings Inc. is 2.84%.
Shares of RH rose 6.7% year to date. At first quarter-end, Miller Value Partners (Trades, Portfolio) held 922,210 shares of the company after reducing the position every quarter since the second of 2017. The holding represents 3.79% of the equity portfolio.
RH has a market cap of $2.4 billion; its shares were traded around $130.78 Friday with a price-earnings ratio of 21.85 and price-sales ratio of 1.37. RH had an annual average earnings growth of 26% over the past five years.
Brighthouse Financial Inc. (BHF, Financial)
Brighthouse Financial shares gained 26.5% year to date. Miller Value Partners (Trades, Portfolio) held 2,286,555 shares of the company after more than doubling the holding since the third quarter of 2018. The holding represents 3.31% of the equity portfolio.
Brighthouse Financial Inc. has a market cap of $4.55 billion; its shares were traded around $39.30 Friday with a price-earnings ratio of 25.28 and price-sales ratio of 0.60.
See Bill Miller’s Miller Value Partners (Trades, Portfolio) portfolio here.
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