Focus On Bill Miller's Long-Term Stock Picks

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 |  Includes: AAPL, ABT, AMZN, BLK, CSCO, EBAY, EMC, JNJ, MDT, MSFT, PEP, PG, QCOM
by: Insider Monkey

Legendary investor Bill Miller recently announced that he won’t be managing Legg Mason’s portfolio. Bill Miller was on top of the investment world just 5 years ago. Since then his $3.85 Billion Legg Mason Capital Management Value (LMVTX) mutual fund lost nearly 40%, whereas the SPY had a slightly positive return. Below we compiled a list of stocks that Miller has been holding for the past two years. These are more likely to be Miller’s high conviction stock picks for the long-term. Miller had at least $140 Million invested in these stocks at the end of September.

CompanyName

Ticker

Value

Activity

APPLE INC

AAPL

227803

-11%

EBAY INC

EBAY

222596

2%

MICROSOFT CORP

MSFT

203871

-12%

PEPSICO INC

PEP

172298

9%

AMAZON COM INC

AMZN

171883

-18%

E M C CORP MA

EMC

169812

-6%

PROCTER & GAMBLE CO

PG

163289

-22%

BLACKROCK INC

BLK

160254

5%

CISCO SYSTEMS INC

CSCO

159194

-13%

QUALCOMM INC

QCOM

147497

-4%

MEDTRONIC INC

MDT

147104

21%

ABBOTT LABORATORIES

ABT

141949

1%

JOHNSON & JOHNSON

JNJ

141125

-2%

Click to enlarge

Apple Inc. (NASDAQ:AAPL) is Miller’s largest position at the end of September. AAPL has a market cap of $363.08 billion. Miller slightly reduced his position in the third quarter and reported to own nearly $230 million of AAPL at the end of September. The stock gained 2.04% so far in the fourth quarter, underperforming the market by 9.96%. The Company reported third quarter revenues of $28.57 billion and net profit of $7.31 billion, compared to revenue of $15.70 billion and net profit of $3.25 billion in the year-ago quarter. Gross margin was 41.7 percent compared to 39.1 percent in the year-ago quarter. AAPL had a high profit margin and had net cash of $25.95 billion with no debt on the balance sheet. The P/E ratio of 14.11 is not high for such a great business. Ken Griffin had several billions invested in AAPL stock and options. D.E Shaw, Jim Simons and George Soros are also bullish about AAPL.

Miller increased his stakes in Ebay Inc. (NASDAQ:EBAY) by 2% and in Pepsico Inc. (NYSE:PEP) by 9% during the third quarter. EBAY has a market cap of $40.06 billion with a P/E ratio of 22.63, while PEP has a market cap of $100.57 billion with a P/E ratio of 16.13. Miller reported to hold $223 million worth of EBAY. Leon Cooperman also had $107 million invested in EBAY. The stock returned 4.92% since the end of September. Miller had $172 million invested in PEP, and the stock gained 5.72% since the end of September. Both stocks underperformed the market by around 7%. Israel Englander and Steven Cohen are also bullish about both EBAY and PEP.

Other mega-cap stocks that Miller is increasing his stakes in include Microsoft Corp. (NASDAQ:MSFT) and Procter & Gamble Co. (NYSE:PG). MSFT has a market cap of $213.67 billion and a P/E ratio of 9.23. Miller had $204 million invested in MSFT at the end of the third quarter. The stock gained 3.64% so far in the fourth quarter, underperforming the market by 8.36%. Ken Fisher had $444 million invested in MSFT at the end of September. Jim Simons, D.E. Shaw and Leon Cooperman also had large amount of shares invested in MSFT. PG has a market cap of $177.38 billion with a P/E ratio of 16.38. Miller reported to hold $163 million worth of PG. Warren Buffett had more than $4.8 billion invested in PG. The stock gained 2.87% since the end of September. Ken Fisher and Jim Simons are also bullish about both PG and MSFT.

Miller’s other large positions that he had held for at least two years include Amazon Com Inc. (NASDAQ:AMZN), EMC Corp. (NYSE:EMC) and BlackRock Inc. (NYSE:BLK). AMZN has a market cap of $88.82 billion with a P/E ratio of 102.96. Miller reported to hold $172 million worth of AMZN. Ken Fisher also had $547 million invested in AMZN. However, the stock lost 9.67% since the end of September. Ken Fisher had $547 million invested in AMZN shares by the end of the third quarter. Since the end of September, EMC performed close to the market with a gain of 10.72%, while BLK returned 18.76%, outperforming the market by 6.76%.

Overall, Miller is bullish about the technology stocks and solid multinational large cap companies like PG, PEP and JNJ. We actually like his stock picks a lot. We have Microsoft in our portfolio and plan to add Apple.

Disclosure: I am long MSFT.