Bill Miller Portfolio: Know the Secrets of a Value Investing Legend

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Jacob Wolinsky
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Bill Miller IV the current majority stakeowner of Miller Value Partners has investment in his blood. His Father Bill Miller III founded the company in 1996 with a focus on value investing principles. In 2023 Bill Miller IV bought the majority of the stake in the company, making him the decision maker. Bill Miller’s portfolio currently has 41 holdings valued at $172 million.

This is a major drop from the beginning of 2021 when AUM was at $3.5 billion. The main reason for that was major trimmings and exits from several holdings in 2023. At the moment, the largest holding is the car manufacturer Stellantis while in second place sits Western Alliance Bancorporation. Other major holdings include Bread Financial Holdings Inc and ProShares Trust.

He exited from Organon & Co (NYSE:OGN), and Chico FAS Inc (NYSE:CHS) holdings. At the beginning of the year, he exited most tech holdings including Meta, Amazon, and Alphabet. Miller recently expressed increased interest in Bitcoin and revealed that he invested in MicroStrategy (NASDAQ:MSTR). From the look at the current reshaping of his portfolio, we can only guess that he may choose a different investment path, but still only time will tell.

Key Holdings

  • Stellantis NV (BIT:STLAM) with 6.87% of the portfolio

One of the few additions to the Millers portfolio in 2023 is a new multinational car manufacturing corporation. They formed by merging the PSA group and Fiat and are currently the fourth largest car manufacturer in the world. Miller bought 496 thousand stocks in Q2 2023 for $16 and its price rose to the current $26.50, resulting in a gain of 58%.

  • Western Alliance Bancorp (NYSE:WAL) with 6.82% of the portfolio

Another new addition to Miller’s portfolio takes the second place in the portfolio. In Q1 he bought 58 thousand stocks at $61, and a quarter later he added 125 thousand shares for $34.68. In Q4 he sold 8 thousand stocks for $50.45 while the price continued to fluctuate. In just a month it fell from $68 to $55. For now, this holding has brought a gain of 28%.

  •  ProShares Trust (NASDAQ:TQQQ) with 6.08% of the portfolio

In Q1 2023 Miller bought 187 thousand ProShares Trust UltraPro stocks at $36.38. This trust uses a strategy that aims to deliver three times the daily returns of the NASDAQ 100 index by utilizing swaps and other derivatives. It can work as a hedge during market declines. Since Miller bought it, the price has steadily increased to current $66.50 generating a gain of 83%.

  • Jackson Financial Inc (NASDAQ:JXN) with 6.07% of the portfolio

The first Jackson Financial trade was made in Q4 2021 and since then it generated a gain of 51%. Miller invested a total of $7.5 million, while his stake is now valued at $11 million. During 2023 he trimmed this holding for about 50 thousand stocks, and Miller now owns about 200 thousand Jackson Financial stocks.

  • Bread Financial Holdings Inc (NYSE:BFH) with 6.02% of the portfolio

Since Q2 2023 Miller has been constantly increasing this position. He started slowly by acquiring 25 thousand shares, and in the next two quarters he bought an additional 280 thousand shares. The value of this holding is at $18.1 million.

  • AT & T Inc (NYSE:T) with 5.50% of the portfolio

Like with other new holdings Miller has been increasing the stake during the whole of 2023. He bought them on three occasions totaling 552 thousand shares for $8.5 million. The share price fluctuates between $14 and $17 but Miller managed to get a gain of 12% from this holding so far.

  • Quad Graphics Inc Class A (NASDAQ:QUAD) with 5.15% of the portfolio

This is one of the most constant holdings in Bill Miller’s portfolio, dating back to 2013. His total investment was $9.94 million, while the current value of 1.6 million shares is $9 million. This holding generated a loss of 9.4%. Its stock price has been fluctuating between $3 and $6 for the last three years. Currently, it is not bringing any good, but selling it entirely would be a loss for the firm.

Sector Allocation

Miller Value Partners managed to diversify their portfolio in a way that no sector is dominant. That keeps them from feeling the heat in a specific industry and minimizes potential losses. Current sector allocation is:

  • Finance with 25.1% of the portfolio valued at $43.1 million
  • Consumer Discretionary with 17% of the portfolio valued at $29.2 million
  • Technology with 15.6% of the portfolio valued at $26.7 million
  • Industrials with 10.6% of the portfolio valued at $18.2%
  • Telecommunication with 9.6% of the portfolio valued at $16.5 million
  • Energy with 4.7% of the portfolio valued at $8.06 million
  • Real Estate with 4.3% of the portfolio valued at $7.32 million
  • Utilities with 2.6% of the portfolio valued at $4.50 million
  • Healthcare with 1.5% of the portfolio valued at $2.56 million
  • Companies that go into the other bracket with 8.9% of the portfolio are valued at $15.2 million.

Miller Value Partners

Bill Miller III started his investment career at Legg Mason in 1981 as a security analyst. He worked there until 2017 when he bought up his share of the company and founded Miller Value Partners. In 2023 his son Bill Miller IV bought 80% of the stake in the company and became the chairman and chief financial officer. His father kept his 20% share in the company.

Take A Look At Bill Miller IV Acquires Majority Stake in Miller Value Partners:

Bill Miller Investment Strategy Analysis

Bill Miller and his son are known as value investors. The father is known as an experienced value investor in the best mold of Warren Buffett. He believes that any stock can be a valuable stock if it is traded below its intrinsic value.

His approach was not defined by buying cheap stocks, but rather undervalued stocks. He pointed out that searching for cheap stocks doesn’t get you much if they are just bad. Their value will not grow, and you will end up with losses.

He was always willing to buy good companies for good prices and with his disciplined approach waited out the market and the real value of the stock.

When constructing a portfolio Miller was always looking at companies with different fundamental valuation factors. Some companies would have a higher P/E ratio, others low. The same goes for price-to-book value. He saw this approach as a great way to diversify the portfolio. He understood that many stocks were either over or undervalued, and that is why he didn’t want to concentrate his bets on one side.

His take on crucial metrics when investing is that the intrinsic value is one of the top factors to look at. But, he also points to the importance of free cash flow and puts it above the intrinsic value of the company. He sees that if the company is earning more than its cost of capital, free cash flow growth can be seen as a proxy for expected annual return.

His son adopted his value investing strategy but recently has also shown new aspirations. He pointed out that BitCoin has a huge growth potential, and that investing in it is crucial due to the changing investing landscape.

The new and never-reached levels of United States debt pushed investors to hedge themselves from debt debasement by investing in gold and BitCoin. Miller saw the surge of BitCoin among institutional investors as a sign that it has a future as an investing asset.

Bill Miller Portfolio Performance Analysis

Historical Performance

Miller Value Partners since their inception in 2009 generated an annualized return of 9.95% when compared to the S&P 500 15.13% returns in the same time frame. When we look at the last decade things clear up a bit. The fund generated 2.92% annual returns and the S&P 500 outperformed with 12.03% returns.

In 2023 the fund generated 12.59 returns, while the S&P 500 delivered more than double – a 26.29% return.

Notable Success

  • Maxar Technologies (NYSE:MAXR). Miller tripled his investment in Maxar technologies in just two years. He started piling up stocks in 2019 for prices between $5 and $8. The stock price quickly rose, and in 2020 he was selling them between $15 and $45. In 2023 the company became private, and its stocks are not available anymore.
  • RH Class A (NYSE:RH). This is another great evaluation of the company’s value which resulted in relatively fast recognition by the market, and massive gains. In Q1 2017 Miller bought a massive stake of 2.63 million shares at $30. He sold the entire stake by the end of 2020 for prices in the range of $53 and $412.
  • Apple Inc (NASDAQ:AAPL). Miller invested in 2013 and 2014 at than undervalued company and bought 2.3 million shares at prices between $16 and $24. He slowly exited from the holding in the period 2016 to 2019 for prices of $30 and $50.

Notable Failures

  • Washington Prime Group (NYSE:WPG). Now a bankrupt company it brought significant losses to Miller and his partners in 2019. He bought over 60 thousand shares valued between $65 and $75 and sold it later at a loss of $33.
  • Silvergate Capital Corp (OTCMKTS:SICP). Miller owned during 2022 a holding of 1.4 million Silvergate Capital stocks paid at $85 and $39. At the beginning of 2023, he needed to cut the losses selling at $10.85.
  • Farfetch Ltd (OTCMKTS:FTCFH). Miller did a lot of dancing around this holding in a period from 2019 to 2023. It started well when he bought a massive stake for less than $10. He managed to sell most of it for prices between $20 and $60. But he again started buying stocks while they were on the downturn for prices of $30 and $15. Later he sold the entire holding for a mere $5 for stock.


What Are Miller Value Partner’s Largest Holdings?

Miller Value Partner’s largest holdings are:

  • Stellantis with 6.87% of the portfolio
  • Western Alliance Bancorp with 6.82% of the portfolio
  • Jackson Financial Class A with 6.07% of the portfolio
  • Bread Financial Holdings with 6.02% of the portfolio
  • AT & T Inc with 5.50% of the portfolio
  • Quad Graphics Inc Class A with 5.15% of the portfolio
  • OneMain Holdings Inc (NYSE:OMN) with 4.73% of the portfolio
  • Buckle Inc (NYSE:BKE) with 4.66% of the portfolio
  • Viatris Inc (NASDAQ:VTRS) with 4.58% of the portfolio.

What Is Miller’s Deep Value Strategy?

Miller’s Deep Value Strategy is aimed at investing in companies with a large margin of safety. Miller’s portfolio managers are identifying companies that are often overlooked by big players, but have a huge potential.

Then they place large concentrated bets and hold them for a long term. This way they aim to generate higher returns.

What Is Bill Miller’s Average Return?

While Bill Miller III worked at Legg Mason Value Trust he became famous for beating the S&P 500 15 years in a row. He annually delivered 15.9% returns on average, while the index generated 11.1%.

When he left the company and started his own, his performance was not as constant as before. With available data, we can assume that since the Miller Value Partners were incepted they annually delivered 9.95%.

Final Considerations

Things at Miller Value Partners have been very busy in the last year. The founder Bill Miller III the famed value investor has exited from the company and left it to his son Bill Miller IV. He shares the same vision as his father and is keen on value investing. But, he has shown interest in investing in alternative assets, like BitCoin.

He sees great potential in cryptocurrencies, and his opinion is that their value and importance are only going to grow over time. He loosened the firm’s portfolio and redirected some of his investments, but since the work is in progress, we will have to wait a bit longer to see the results.

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Jacob Wolinsky is the founder of HedgeFundAlpha (formerly ValueWalk Premium), a popular value investing and hedge fund focused intelligence service. Prior to founding the company, Jacob worked as an equity analyst focused on small caps. Jacob lives with his wife and five kids in Passaic NJ. - Email: jacob(at) FD: I do not purchase any equities to avoid conflict of interest and any insider information. I only purchase broad-based ETFs and mutual funds.