저자: BillMiller · 외국인
요약 보기
Bill Miller은 가치투자를 장부상 가치가 아닌 경제적 가치(잉여현금흐름 대비 할인, 자본비용 상회 수익)로 정의한다. 항공주는 통합 이후 상위 3사가 약 75%를 점유해 현금창출력이 개선됐고, 불황에도 델타 등 우량사는 흑자가 가능하다고 본다. Valeant는 주가가 과도하게 하락한 역발상 종목으로 보유 중이며, 실적 상향 가능성을 언급한다. Tyco 사례를 들어 과도한 레버리지 기업은 자산매각과 부채상환으로 회복될 수 있다고 주장하며 3~4년 내 주당 50~60달러를 제시한다.
다듬은 글
You're also committed to value and you're known as a value investor, you're known as a contrarian investor. What does value mean to Bill Miller? Well, people have asked me that question a lot over the years and and and one of my stock answers is if I had my own personal definition of value, who would care?
It wouldn't wouldn't have a chance of operating in the market. So, you really have to if you're going to try and buy things that are trading at value names, they have to be trading at a discount to intrinsic business value. And intrinsic business value comes right out of the textbooks, which is just the present value of the future free cash flows of the business.
So, we look for businesses that are naturally cash generative and we're trying to buy them when their free cash flow yield, their free cash flow divided by the shares outstanding, is 50% or more 50% or more higher than the market. So, you're buying things that are demonstrably cheaper. It's it's it's similar it's similar in equity investing to if you were buying bonds.
So, you know, high yield bonds are high yield bonds cuz they tend to be lower quality, they trade at big spreads to spreads to treasuries, but but historically they've done quite well. And similarly, companies that have high free cash flow yields and trade at big discounts to the overall market tend to do well.
That's the classic definition and you you subscribe to that definition. Well, you know, many value investors are are are driven more by what I call accounting value as opposed to economic value. Right. And I think probably the greatest example of that in the markets in the last 25 years is the people that have hated Amazon since it came public because they claimed it never made any money.
And so, while Amazon rarely reported GAAP accounting profits, it didn't go from a $400 million company to a $400 billion company not making any money. They generated enormous economic value, but it wasn't captured by the accounting metrics. But what, you know, sets you apart when when you talk about being a value investor, what do you mean aside from just the traditional accounting metrics, what are you looking for in a company?
Well, we're looking for companies that can earn above their cost of capital through an economic cycle. So, the reason for example that auto companies trade at two and a half times enterprise value to EBITDA, among the cheapest of any group, is they don't earn their cost of capital through an economic cycle.
Where you can really make significant amounts of money is when an industry changes from being one that doesn't generate economic value to one that does. That's recently happened and we believe it's happened with the airlines, which which were among the worst industries in history to ever try and invest in.
Right. But and in fact in the prior to the financial crisis, the 25 years before the financial crisis, they had exactly two years of positive cash flow. Now they've had positive cash flow in every year except for 2009. And we actually believe if we have a recession that's as bad as the 2009 or eight or nine recession, that the that the quality companies in an industry like Delta will be profitable.
And United Continental, Delta, American, those are major holdings in the opportunity fund. The the main difference has been consolidation. So, prior to the Delta Northwest merger, the highest market share of the major carriers is around 12%. But with the with the consolidation the major consolidation has taken place, now the top three carriers control 75% of the industry.
Each has about 25%. Throw in Southwest, you're up to 90%. And then even in a commodity business, typically if it gets down to two or three major players, that they can usually make money. And that's what's happened since then. Are there times when the market just doesn't catch up to what you're seeing, the value that you're seeing?
And therefore that you are really you know, swimming against the tide for many you know, for several for a whole cycle or for many years? So, right now for example, we're you know, we're we're swimming against the tide with Valeant, a controversial drug company that Bill Ackman just sold out of recently.
And the So, you own the common stock We own the common stock. at your income and and you own the bond, you own the bond, right? both of them. Yeah, and and the common and you Well, okay, explain that one, Bill. Well, so we we are ever our our going in cost and Val- Valiant's now around 11. Our our starting cost in Valiant was around in the 30s.
So, it wasn't 190 like like the last one. But, we've been but but no, no, if I wouldn't have bought it in the 30s if I thought it was going to 11. Right. So, there've been there there've been several things that have happened since then. One of the major ones is a significant drop in guidance when they when they announced in February that they were going to they gave the guidance for the year and it was considerably lower than people expected.
Although, they they were signaling that for a couple of months before that. So, I think most people don't get into the detail of companies when that happened it it sold off. But, um with with something like, you know, with something like Valiant, um we we happen to believe that especially since 2009 people become risk-phobic.
Mhm. And and so, typically perceived risk is is way under-priced relative to real risk. Not always, but in general since that since that period of time. When bonds traded at 45 times what they earn and stocks traded at 18 times what they earn. That's huge premium for safety and for and for liquidity.
So, with Valiant we're trying to pay attention to the fundamentals and so and what's going on with the business and we think that we think actually when they report this quarter it'll probably be a beat and raise quarter. Stock looks to have bottomed and gone down. But, I mean, we've you know, we've we've gotten a lot of heat for owning
I'm sure you have. owning Valiant. Although, I get the same time, you know, we mentioned Amazon earlier. Uh we bought Amazon on the IPO. We sold it after it doubled. We bought it back again in 1999 3 years later at $88. It went to six from 88 and I think our average cost on Amazon is around 10. So, it's 400 it's 880 or 90 today.
compare the two? I mean, is there any comparison? but there is a good comparison which is Tyco. Oh, okay. So, Tyco with Dennis Kozlowski and Mark Schwartz was the CFO and they were they were kicked out and people thought the company was going to go bankrupt. They brought in a new team, Ed Breen and you know, who'd worked at General Instrument before and now is the CEO of DuPont.
Um he came in and it was the same thing, highly levered company built on acquisitions. Um you know, stripping out the costs and when it when Kozlowski and Schwartz left, the stock collapsed down to you know, single digits. Right. And it was the same it's the same story. They had good underlying businesses, good cash flows, over levered.
So two things need to happen. Number one, they need to sell some assets to bring the leverage down to a more manageable level. And second, they need to have the free cash flow then to pay down the debt over over time. And then and and you made many, many times your money with Ed Breen in in the in Tyco and I think, you know, from the $11 level, we think it could be a $50 or $60 stock in three to four years.
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