Miller Value Partners, an investment management company, released its “Opportunity Equity Strategy” third-quarter 2022 investor letter. A copy of the same can be downloaded here. In the third quarter, the Opportunity Equity Strategy returned -4.62% net of fees compared to -4.88% return for the S&P 500 Index. In addition, please check the fund’s top five holdings to know its best picks in 2022.
Miller Value Partners discussed stocks like OneMain Holdings, Inc. (NYSE:OMF) in the Q3 2022 investor letter. Based in Evansville, Indiana, OneMain Holdings, Inc. (NYSE:OMF) is a financial services company. On October 18, 2022, OneMain Holdings, Inc. (NYSE:OMF) stock closed at $32.08 per share. One-month return of OneMain Holdings, Inc. (NYSE:OMF) was -1.90% and its shares lost 46.79% of their value over the last 52 weeks. OneMain Holdings, Inc. (NYSE:OMF) has a market capitalization of $3.967 billion.
Here is what Miller Value Partners specifically said about OneMain Holdings, Inc. (NYSE:OMF) in its Q3 2022 investor letter:
“We own OneMain Holdings, Inc. (NYSE:OMF) ($31.33), a subprime consumer credit company, which exemplifies the situation. It trades at 4x earnings with a 12% dividend yield, which we believe is secure through any recession. We estimate that in a severe 2008-style recession (which we don’t expect), it could earn $4 per share, 45% less than its 2022 estimated earnings. The stock is down 48% from its highs, close to a worst-case recession earnings hit. Not a coincidence in my view. It trades for 7x estimated worst-case trough earnings. It’s currently buying back its stock at highly accretive values, and we expect it to grow earnings per share in the high single digits through the cycle. You’re paid handsomely to be patient and take a long-term view.
People think you are crazy to mention a subprime consumer credit company heading into a recession. The market obsesses over marginal change. Gone are the days when incremental news no longer moves a stock because it was already discounted. This creates excess volatility. Most managers have adapted by minimizing or eliminating contrarian buy calls. This scarcity exacerbates volatility, but can also increase opportunity. Therefore, we believe volatility is the price you pay for outperformance.
We believe OMF will recover from any recession and trade at new highs within 3 years. If it just hits its previous highs, it will compound at 31% per year total return. Even if it goes nowhere, you make 12% per year on the dividend alone. Given it’s already pricing in a dire recession, fundamentally the stock should find a floor soon. Given all the algorithms that trade on the next headline, I wouldn’t wager much on that. If our analysis is correct, lower near-term prices just amplify the ensuing recovery…” (Click here to read the full text)
OneMain Holdings, Inc. (NYSE:OMF) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 28 hedge fund portfolios held OneMain Holdings, Inc. (NYSE:OMF) at the end of the second quarter which was 37 in the previous quarter.
We discussed OneMain Holdings, Inc. (NYSE:OMF) in another article and shared the list of stocks to buy for interest rate hikes. In addition, please check out our hedge fund investor letters Q3 2022 page for more investor letters from hedge funds and other leading investors.
When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.
Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.
At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.
Do the math. According to Musk, this technology could be worth $250 trillion by 2040.
Put another way, that’s roughly equal to:
175 Teslas
107 Amazons
140 Metas
84 Googles
65 Microsofts
And 55 Nvidias
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It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.
Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.
How could anything be worth that much?
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In fact, Verge argues this company’s supercheap AI technology should concern rivals.
Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.
Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.
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