Investor Bill Miller is bullish on
Teva Pharmaceutical Industries,
cruise lines, and Bitcoin, saying that the cryptocurrency is “gaining acceptance every day.”
Another notable value investor, John Rogers, meanwhile, likes
(ticker: NLSN) and
Madison Square Garden Entertainment
Miller and Rogers were among seven who participated in a roundtable last Thursday that was moderated by Mellody Hobson, the co-CEO and president of Ariel Investments. (Rogers is Ariel’s other co-CEO as well as its chairman and chief investment officer.)
Miller, who runs the
Miller Opportunity Trust
(LGOAX), said: “I love Teva. I think it’s one of the best names in the market.”
Teva (TEVA), whose stock trades around $11, could get a lift if there is a global opioid settlement this year, he says. Teva is among the drug companies named in a series of lawsuits.
“So if that cloud lifts on Teva—it’s trading for about four times earnings and it should be trading around at least 10 to 12 times earnings,” Miller said, according to a transcript of the discussion. “It’s the largest generics company in the world. So that can give you a double from here fairly easily. It’s also started to act much better this year.”
Miller remains a fan of Bitcoin, which has been on a wild ride lately, dropping 10% Monday to about $34,000 after recently topping $40,000.
CEO Warren Buffett’s comment that Bitcoin is “rat poison,” Miller said that the real poison was cash, which yields nothing at a time of 2% annual inflation.
“The government wants you to lose money in cash for the foreseeable future,” Miller said. “And people aren’t going to put up with that after a while.”
“So this is one of those things where the asymmetry there is so gigantic. Bitcoin’s market cap is now greater than
[JPM] (it’s over $600 billion). Bitcoin has been around 12 years. It’s greater than Berkshire Hathaway [BRK.B]. A friend of mine who’s been much earlier than I was in the game, he said, ‘In a few years, people will consider it financial malpractice if you don’t have Bitcoin in client accounts.’ It’s one of the easiest things out there. You have to take volatility, but it’s quite remarkable. It’s a technological innovation like we’ve never seen before, and it’s gaining acceptance every day.”
Miller likes the cruise-line companies because he believes that leisure travel will come back more quickly than business travel. He also favors Gannett (GCI), the debt-heavy newspaper publisher, whose shares trade around $3 a share.
“And so I’ve always been attracted to low prices. It hurts me, because the stuff I’ve made the most money in are the big growth names. But I have this like heroin-like addiction to the busted companies that Warren [Buffett] calls the cigar butts. They have like two puffs left in them, but they’re very cheap. One of my favorite names right now is Gannett, which is at $3. Newspapers are going away. But if it works, it’ll be $25.”
Rogers of Ariel said that Madison Square Garden Entertainment was probably his “absolute favorite stock.”
The company, which was one of Barron’s top 10 stock picks for 2021, owns Madison Square Garden in Manhattan and is building a $1.7 billion concert venue in Las Vegas called the Sphere. Rogers said that sound technology being used for the Sphere would make a distinctive arena and that the company offered a play on New York City’s post-pandemic revival.
“If you believe in New York City like we do and the future of New York, I just think it’s going to be a real grand slam for us.” Rogers said. He added the Nielsen has moved from traditional TV ratings to measuring streaming and is “well-positioned” for the changing media landscape.
Rogers is also bullish on
(VIAC), arguing that its collection of media and entertainment properties is undervalued in the stock market.
“We think they’re extraordinarily well positioned, and some day Shari Redstone might realize it might make sense for it to be partnered with one of the top tech companies, Rogers said. “So there’s still significant upside. It’s still selling at a low PE, less than 10 times next year’s earnings. Terrific franchise.”
Another participant in the Ariel roundtable, David Herro, the longtime manager of the
Oakmark International Fund
Credit Suisse Group
(CS), a global bank with sizable asset management and investment banking businesses. Credit Suisse has an “annuity-like” income stream, Herro said. And it has a cheap valuation with a single-digit price/earnings ratio and a price/book ratio in the 65% to 70% range.
Other participants at the Ariel-sponsored discussion were Rupal Bhansali, chief investment officer for international investments at Ariel; Staley Cates, vice chairman of Southeastern Asset Management; Mario Gabelli, the founder and chairman of Gamco Investors, and Daniel O’Keefe, a managing director at Artisan Partners.
Bhansali and Gabelli are members of the Barron’s Roundtable, whose main January event is occurring this week.
Write to Andrew Bary at firstname.lastname@example.org