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Globe and Mail
11-05-2025
- Business
- Globe and Mail
Billionaire Investor Bill Miller, Who Beat the S&P 500 Index for 15 Consecutive Years, Says Buy Amazon and Sell Tesla
The legendary value investor Bill Miller has built up quite the resume over decades of investing. While overseeing the Legg Mason Capital Management Value Trust fund, Miller beat the broader benchmark S&P 500 index for 15 consecutive years from 1991 to 2005. Today, Miller is a billionaire. He also founded Miller Value Funds and continues to invest through the firms' various funds. Given his achievements, many market watchers pay attention to what he is buying and selling. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » Recently, in Patient Capital Management's quarterly update, where Miller is a minority owner and advisor to the firm, he said that he views the e-commerce giant Amazon (NASDAQ: AMZN) as a buy, while Tesla (NASDAQ: TSLA) as a sell. Here's why. Miller thinks Tesla is overvalued The electric vehicle (EV) maker Tesla is the only stock in the " Magnificent Seven" that Miller seems to think is overvalued. He doesn't believe Tesla is a bad company. In fact, he specifically called it an "incredibly company" and praised CEO Elon Musk, calling him a genius. But at the end of the day, Miller, a value investor who closely scrutinizes valuations, said Tesla simply is too expensive. "They're going to have to knock the cover off the ball in terms of self-driving cars and AI," he said. Data by YCharts; PE = price to earnings. So far this year, Tesla has done the opposite. Whether Musk's foray into politics has damaged the brand is hard to know for sure, but the results have not been good. In the first quarter of the year, Tesla reported deliveries of 337,000, the lowest quarterly level seen in over two years. The company is also starting to face intense competition. The Chinese EV maker BYD has seemingly unseated it in China, where it controls over 30% of market share. BYD has developed cheaper models and better charging technology. Miller said: "Tesla's charging $8,000 for their self-driving system, and BYD has a self-driving system in a $9,000 car. BYD's cars, I think they're just better." Much of Tesla's valuation seems to depend on future initiatives. In June, the company is expected to conduct a much-anticipated Robotaxi demonstration, featuring the company's unsupervised full self-driving (FSD) technology. Many doubts linger about that technology and the timeline Musk wants to roll it out. But even if the Robotaxi demonstration goes well, Tesla still faces competition from smaller challengers like Pony AI and the Jeff Bezos-backed Slate Auto. I would agree with Miller's assessment that the valuation is baking in too much benefit from future initiatives, and does not sufficiently reflect the concern about issues in the core EV business. Concerns about Amazon's exposure to China are overblown Miller has quite the history with Amazon, considering he was an early investor in the e-commerce and tech behemoth. He has previously claimed to be "the largest personal owner of Amazon whose last name isn't Bezos." Among his reasons to be bullish on Amazon are faith in CEO Andy Jassy, strong performance in divisions like Amazon Web Services (AWS) and logistics, the company's play into satellite internet, and the fact that Miller views concerns about the company's exposure to China to be overblown. Given the trade spat between the U.S. and China, and the ensuing tariffs that each country has imposed on one another, investors have been concerned by stocks that have too much exposure to the world's second-biggest economy. Wedbush Securities has previously estimated that as much as 70% of goods sold through Amazon come from China. Data by YCharts. Still, given the resources at its disposal and market share in e-commerce, Amazon has some of the most advanced supply chain capabilities in the world. Jassy has previously said he thinks sellers will be able to pass higher costs on to borrowers. He has also said more recently that the diversity of sellers Amazon has on its platform is an advantage because not all will raise prices; some may choose to keep prices as is to gain market share. I think concerns about Amazon's exposure to China are warranted, but I also believe the company has the supply chain capabilities to weather the storm. Amazon has revenue diversity from the likes of AWS and advertising streams that have been performing well. Assuming U.S. tariffs on China and China's tariffs on the U.S. eventually come down, Amazon does trade attractively at 30 times forward earnings, which is near the stock's five-year low (chart above). Even if the trade war between the U.S. and China lasts longer than expected, I expect Amazon can weather the storm, although earnings could take a temporary hit. Don't miss this second chance at a potentially lucrative opportunity Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $302,503!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $37,640!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $614,911!* Right now, we're issuing 'Double Down' alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon. *Stock Advisor returns as of May 5, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Tesla. The Motley Fool recommends BYD Company. The Motley Fool has a disclosure policy.
Yahoo
08-05-2025
- Business
- Yahoo
Legendary investor Bill Miller on why the worst is over for stocks, Amazon's a buy and Tesla isn't
Is it time for investors to breathe a bit easier? 'I think the worst is over for the market. I'm pretty confident about that,' says legendary investor Bill Miller, best known for beating the S&P 500 SPX 15 straight years. My second wife says her 2 kids should inherit our estate, but I also have 2 kids. Is that fair? 'I am scared to death that I'll run out of money': My wife and I are in our 50s and have $4.4 million. Can we retire early? Markets are resilient — but this bank says it could fall apart quickly. 'Fundamentals remain dire.' Suze Orman says retirees should have a 5-year 'just-in-case' fund. Is this true? My father is giving me $250K to buy a home, but told me not to tell my two siblings. Am I morally obligated to tell them? Miller made the remarks in a recent quarterly update from Patient Capital Management, where he's a minority owner and advisor to the firm. One reason he's confident is the commonalty of 20% corrections, seen in in 2011, 2016, 2018, and 2022. The S&P 500 narrowly avoided a bear market this year, falling 18.9% from the Feb. 19 closing high to the April 8 closing low. 'But they're psychologically very rare in the sense that that's the point at which people start to flip out,' said Miller, noting that selloffs above 5% to 10% start to make people nervous. 'Above 15%, there's probably a lot of selling. By the time you hit 20%, you've pretty much discounted most of the scenarios that people are worried about in the market.' He views history as a guide and says no matter what the cause of the selloff, when it comes to what happens next, 'probabilistically you're going to do very, very well if you're in the market,' he said. Miller said President Donald Trump's tariff policy was 'so incoherent and stupid that everybody was stunned,' but the market expects and will get deals. A 'gradual softening' by the U.S. is likely because Trump could lose control of Congress to the Democrats if he lets uncertainty linger for two years, he added. The investor then digs into stocks and thoughts on how China tariffs could impact Amazon AMZN. Miller was an early investor in the e-commerce giant, claiming to be 'the largest personal owner of Amazon whose last name isn't Bezos.' His reasons to be upbeat? Confidence in CEO Andy Jassy; the fact that it China items sourced by it make up a small part of their business; its other units such as Amazon Web Services and logistics are 'doing very well'; and Amazon's Project Kuiper satellite internet service, which he says is set to be a massive competitor for SpaceX-owned Starlink. 'Probably the best evidence that the Mag 7 will fight another day, except for Tesla, is that Amazon is spending a hundred billion dollars this year to meet customer demand for compute and for chips and for AWS to build data centers,' he said. Miller said while Tesla TSLA is an 'incredible company,' with a 'genius' of a leader, it's 'not worth the current price.' 'They're going to have to knock the cover off the ball in terms of self-driving cars and AI,' he said. 'Tesla's charging $8,000 for their self-driving system and BYD has a self-driving system in a $9,000 car. BYD's cars, I think they're just better.' He's fan of Strategy, formerly MicroStrategy MSTR, which he refers to as 'bitcoin on steroids,' highlighting its overperformance versus Nvidia since adopting its corporate bitcoin Treasury strategy. A longtime bitcoin believer, Miller is sticking with that stance. 'I think that pretty much whatever you're holding in bitcoin it's not big enough,' he said. He said it's a shelter in case of a dollar storm, and trading 'way too low for the fact that it's now got a favorable regulatory environment.' Also if the U.S. starts to buy bitcoin BTCUSD strategically, other countries will follow and it's a fixed supply. Miller finishes off with mentions of some smaller names stocks that he sees as cheap, such as ID tech group Clear Secure YOU, specialty AI company Nebius Group NBIS and Grail GRAL, a biotech focused on early cancer detection that's expected to be a 'gigantic' market. Read: This zero-day options craze could finally be coming to popular stocks like Nvidia and Tesla. Here's what to know. U.S. stocks DJIA SPX COMP have opened higher on trade talk hopes and as investors await a Fed decision. Treasury yields BX:TMUBMUSD10Y BX:TMUBMUSD02Y are steady, gold GC00 is dropping and the dollar DXYis firming up. Key asset performance Last 5d 1m YTD 1y S&P 500 5606.91 0.83% 12.53% -4.67% 8.08% Nasdaq Composite 17,689.66 1.31% 15.86% -8.39% 8.31% 10-year Treasury 4.328 16.40 -2.80 -24.80 -17.30 Gold 3395.3 2.91% 9.53% 28.64% 46.60% Oil 60.07 3.18% -4.23% -16.42% -24.17% Data: MarketWatch. Treasury yields change expressed in basis points A Fed decision on interest rates is coming at 2 p.m., followed by a news conference with Chairman Jerome Powell at 2:30 p.m. Treasury Secretary Scott Bessent and other top U.S. officials will meet with their Chinese counterparts in Geneva in the first major talks since Trump's tariffs were announced. China announced several moves to combat U.S. tariff pressure, including rate cuts and plans to cut bank reserve requirements. Disney DIS shares are jumping after the media giant beat earnings expectations and lifted its outlook. Uber UBER is slipping after mixed results. Shares of WW International WW, known as Weight Watchers, filed for bankruptcy and shares are tumbling. AMD shares AMD are up after an upbeat outlook from the chip maker. Super Micro Computer SMCI cut its outlook again and shares are falling. EV maker Rivian RIVN lowered its sales guidance, saying it's not immune to tariff stress. Vice President JD Vance will speak at the Munich Leaders Meeting in D.C. later. Got your Real ID? You should still get to the airport at least 3 hours early. How is Elon Musk powering his supercomputer? Telemarketers are selling bare bones healthcare plans by signing people up for fake jobs These were the most active tickers on MarketWatch as of 6 a.m. Ticker Security name AM Antero Midstream NVDA Nvidia TSLA Tesla PLTR Palantir Technologies AMD Advanced Micro Devices GME GameStop AAPL Apple AMZN Amazon TSM Taiwan Semiconductor Manufacturing SMCI Super Micro Computer Meth-pipe chomping raccoon leads cops to big drug haul. WW2 Enigma code would have been no match for AI. Missing 500 days on remote island, miniature dachshund emerges fat and happy. My eldest son refused to share his father's $500K inheritance with his siblings. Should I cut him off? I'm 65 and a widow with 5 children. Should I split my $1.1 million nest egg between them while I'm still alive? My husband and I have $3M and are blessed with 3 children. Are we obliged to give them each $50K for their education? How investors should think about Berkshire's stock price without Buffett 'I'm very cynical': My stepmother, 85, makes bizarre requests for money from my father's $10M trust. Should I be concerned?
Yahoo
24-04-2025
- Business
- Yahoo
Royalty Pharma PLC (RPRX) Surged Following an Acquisition Announcement
Patient Capital Management, a value investing firm, released its 'Patient Capital Opportunity Equity Strategy' first quarter 2025 investor letter. A copy of the letter can be downloaded here. 2025 got out to a solid start with the market hitting all-time highs in mid-February. However, a dramatic reversal pushed the S&P 500 down 8.7%, closing the quarter down 4.3%. During the quarter, the strategy returned -9.5% net of fees compared to the S&P 500's -4.3% return. According to a three-factor performance attribution model, allocation and interaction effects contributed positively to the portfolio's performance, which were partially offset by selection effects. In addition, you can check the fund's top 5 holdings to know its best picks in 2025. In its first-quarter 2025 investor letter, Patient Capital Opportunity Equity Strategy highlighted stocks such as Royalty Pharma plc (NASDAQ:RPRX). Royalty Pharma plc (NASDAQ:RPRX) is a buyer of biopharmaceutical royalties and a funder of innovations in the biopharmaceutical industry. The one-month return of Royalty Pharma plc (NASDAQ:RPRX) was 0.13%, and its shares gained 12.74% of their value over the last 52 weeks. On April 23, 2025, Royalty Pharma plc (NASDAQ:RPRX) stock closed at $31.69 per share with a market capitalization of $18.2 billion. Patient Capital Opportunity Equity Strategy stated the following regarding Royalty Pharma plc (NASDAQ:RPRX) in its Q1 2025 investor letter: "Royalty Pharma plc (NASDAQ:RPRX) was up nicely in the first quarter following the announced acquisition of its external manager. The market responded positively, pushing the stock up +23% as the new structure simplifies the business model and more closely aligns management with shareholders. We remain strong believers in the business and the high-quality management team running it. We view this as just another step in the company's journey toward maximizing shareholder value. The company has an impressive track record, running the business for over 20 years as a private fund before bringing it public. The market opportunity for external royalty funding has only expanded as early-stage start-ups need capital and established players look to reduce debt levels. Royalty Pharma is ideally positioned as the partner of choice. The company maintains strong discipline, consistently achieving deal internal rate of returns (IRRs) in the low teens (unlevered). As they continue delivering results as a public company, we expect the market will increasingly take notice." A scientist in a laboratory looking through a microscope, surrounded by petri dishes and beakers while researching new biopharmaceutical advances. Royalty Pharma plc (NASDAQ:RPRX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held Royalty Pharma plc (NASDAQ:RPRX) at the end of the fourth quarter, compared to 33 in the third quarter. While we acknowledge the potential of Royalty Pharma plc (NASDAQ:RPRX) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. In another article, we covered Royalty Pharma plc (NASDAQ:RPRX) and shared the list of most undervalued healthcare stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
24-04-2025
- Business
- Yahoo
Here's Why Dave & Buster's Entertainment (PLAY) Traded Lower in Q1
Patient Capital Management, a value investing firm, released its 'Patient Capital Opportunity Equity Strategy' first quarter 2025 investor letter. A copy of the letter can be downloaded here. 2025 got out to a solid start with the market hitting all-time highs in mid-February. However, a dramatic reversal pushed the S&P 500 down 8.7%, closing the quarter down 4.3%. During the quarter, the strategy returned -9.5% net of fees compared to the S&P 500's -4.3% return. According to a three-factor performance attribution model, allocation and interaction effects contributed positively to the portfolio's performance, which were partially offset by selection effects. In addition, you can check the fund's top 5 holdings to know its best picks in 2025. In its first-quarter 2025 investor letter, Patient Capital Opportunity Equity Strategy highlighted stocks such as Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY). Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) is a leading operator of entertainment and dining venues for adults and families. The one-month return of Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) was -1.77%, and its shares lost 62.43% of their value over the last 52 weeks. On April 23, 2025, Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) stock closed at $19.48 per share with a market capitalization of $672.358 million. Patient Capital Opportunity Equity Strategy stated the following regarding Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) in its Q1 2025 investor letter: "Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) trended lower over the first quarter as the market continued to worry about revenue visibility. The company had a disappointing 2024, culminating in the abrupt departure of then-CEO Chris Morris. Founded in 1982 in Dallas, Texas, the company has expanded to over 200 venues in North America across two brands (Dave & Busters, and Main Event). The company is in the middle of a multi-year transformation focused on reinvigorating growth through store remodels, store expansions, and technology upgrades while enhancing margins through cost optimizations and synergies. Despite the efforts, the results haven't yet materialized in the numbers as the challenging macro environment continues to weigh on consumer expenditures. In the meantime, an activist, Hill Path Capital, has built up a position in the company and taken two board seats. With the Chairman of the Board stepping in as CEO, we are already starting to see improved results with the focus on a back-to-basics strategy delivering better than expected results in March and April. While the timing of business model inflection remains uncertain, what's clear is the stock is trading at an all-time low valuation of 6.8x forward earnings. As the company works to improve its operations, they've been actively returning cash to shareholders through buybacks, repurchasing 12% of shares outstanding over the last 12 months." A crowded performance hall with an audience enjoying a captivating show. Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) at the end of the fourth quarter, compared to 28 in the third quarter. While we acknowledge the potential of Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. In another article, we covered Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) and shared the list of stocks with heavy insider buying in 2025. Patient Capital Opportunity Equity Strategy initiated a position in Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) during Q3 2024. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks. Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
24-04-2025
- Business
- Yahoo
What Will be the Future of Seadrill Limited (SDRL)?
Patient Capital Management, a value investing firm, released its 'Patient Capital Opportunity Equity Strategy' first quarter 2025 investor letter. A copy of the letter can be downloaded here. 2025 got out to a solid start with the market hitting all-time highs in mid-February. However, a dramatic reversal pushed the S&P 500 down 8.7%, closing the quarter down 4.3%. During the quarter, the strategy returned -9.5% net of fees compared to the S&P 500's -4.3% return. According to a three-factor performance attribution model, allocation and interaction effects contributed positively to the portfolio's performance, which were partially offset by selection effects. In addition, you can check the fund's top 5 holdings to know its best picks in 2025. In its first-quarter 2025 investor letter, Patient Capital Opportunity Equity Strategy highlighted stocks such as Seadrill Limited (NYSE:SDRL). Based in Hamilton, Bermuda, Seadrill Limited (NYSE:SDRL) offers offshore contract drilling services to the oil and gas industry. The one-month return of Seadrill Limited (NYSE:SDRL) was -19.40%, and its shares lost 58.37% of their value over the last 52 weeks. On April 23, 2025, Seadrill Limited (NYSE:SDRL) stock closed at $20.48 per share with a market capitalization of $1.27 billion. Patient Capital Opportunity Equity Strategy stated the following regarding Seadrill Limited (NYSE:SDRL) in its Q1 2025 investor letter: "Seadrill Limited (NYSE:SDRL) is the fourth largest pure play deepwater drilling specialist. The company emerged from bankruptcy in February 2022 with a net cash position and is positioned to benefit from limited supply and increasing demand in the deepwater drilling rig market. Nearly half of all deepwater drilling rigs worldwide were scrapped during the last decade, while industry consolidation has created a more rational competitive landscape than we've seen historically. Although oil demand has remained reasonably healthy, surprisingly strong onshore production from the USA, Canada and Russia has helped keep a lid on prices. While this has negatively impacted contract rates near-term, we believe that long-term future shale supply growth will be limited, and more offshore supply will be required benefitting offshore drillers. Given its highly specialized rig fleet and minimal debt, we believe the company is well positioned to benefit from improving prices when demand rebounds. We believe Seadrill could either lead industry consolidation or become an acquisition target." Drilling rig silhouetted against a setting sun in an offshore location. Seadrill Limited (NYSE:SDRL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held Seadrill Limited (NYSE:SDRL) at the end of the fourth quarter, compared to 42 in the third quarter. While we acknowledge the potential of Seadrill Limited (NYSE:SDRL) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. In another article, we covered Seadrill Limited (NYSE:SDRL) and shared top stock picks from Paul Singer's latest portfolio. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
