Legendary Investor Bill Miller Talks Amazon (AMZN), Disney (DIS) Takeover

The father-son duo of Bill Miller and Bill Miller IV appeared on CNBC on Father’s Day to discuss some of the favorite stock picks of Miller Value Investors, including Amazon.com, Inc. (NASDAQ:AMZN), Walt Disney Co (NYSE:DIS), and Tupperware Brands Corporation (NYSE:TUP).

Miller Value Investors incorporates many of the same investing principles that served Bill Miller well during his successful 28-year run at Legg Mason Capital Management. Among them, the fund seeks to invest for the long-term in companies which it deems to be undervalued based on its own estimates of those companies’ intrinsic value.

Miller Value Investors’ Opportunity Equity strategy has returned 7.86% annualized since its inception in 2000, outpacing the market by 2.14 percentage points per year on average. Our flagship “Best Performing Hedge Funds Strategy” has performed even better, returning 87.8% since inception vs. 53.3% gains for the SPY. You can see our latest picks by trying our newsletters free of charge for 14 days.

Amazon.com, Inc. (NASDAQ:AMZN)

Amazon.com, Inc. (NASDAQ:AMZN), which has gained another 47% in 2018, remains a favorite stock pick of Bill Miller. Miller does not believe that Amazon will acquire a media company to grow Prime Video, nor does he think that it needs to. He noted that Amazon and Netflix, Inc. (NASDAQ:NFLX) already have the capability to produce and distribute their own original content online, giving them little incentive to purchase an expensive media company.

Miller sees Jeff Bezos as trying to duplicate the Netflix, Inc. (NASDAQ:NFLX) model, developing so much original content for Prime Video that it becomes a fixed-cost enterprise which Amazon.com, Inc. (NASDAQ:AMZN) can later take advantage of by further boosting Prime membership fees. While Miller also thinks highly of Netflix as a company and has owned it in the past, he does think the price is high right now.

On the next page we’ll look at two other stocks discussed by Bill Miller and his son Bill Miller IV during their recent interview.

Walt Disney Co (NYSE:DIS)

Bill Miller believes that Walt Disney Co (NYSE:DIS) could be a good acquisition for Apple Inc. (NASDAQ:AAPL) to help it rapidly expand its media offerings. Apple is becoming more aggressive on the media front recently, having signed Oprah to produce shows for what will undoubtedly be a new video platform launched by the tech giant.

However, Miller raises another interesting name as a potential Walt Disney Co (NYSE:DIS) buyer, that being billionaire Warren Buffett of Berkshire Hathaway. Miller states that Berkshire could spin off Disney’s theme parks into an MLP, immediately recouping a portion of the sale price, which could make the deal a little more palatable for the holding company. He also likes a Disney/Berkshire tie-up from the perspective that it would help diversify Berkshire’s portfolio of companies, which has little in the way of media/entertainment properties.

Tupperware Brands Corporation (NYSE:TUP)

Bill Miller IV listed Tupperware Brands Corporation (NYSE:TUP) as one of the stocks that Miller Value Investors has taken note of recently, citing the company’s safe dividend, which currently yields 6% annually. He pointed out that despite being a stable company that should achieve annual growth in-line with broader GDP growth and strong return on equity, Tupperware shares are currently trading near 6-year lows at less than half of what they were trading for in late-2013, in addition to being down by nearly 30% in 2018.

Tupperware Brands Corporation (NYSE:TUP) has been hurt by fears over the state of emerging markets, where it’s considered to have great growth opportunities, as well as by the strength of the U.S dollar. Tupperware cut its fiscal year 2018 guidance earlier this year, citing supply chain issues in Brazil, among other challenges, but believes that the majority of those obstacles are temporary.

Disclosure: None