Outsource to Bill Miller

A look at some of Bill Miller's recent buys, focusing on stocks which haven't done so well this year; perhaps there are good bargains. And as your broker might have told you...

"Heck if you liked it at X$ you gotta love it at (X-50%)$!"

So, for example, maybe if Bill Miller loved KB Homes (NYSE:KBH) at $70... then perhaps he loves it now even more at around $44. Or not. But its probably not a bad use of time checking fallen stock picks from top investors. So lets get to it- what hasn't worked out well recently for Mr. Miller?

• As we said, KBH bought around $70 early this year, now down over 35% to around $44. He has even added to this position as the stock has fallen, increasing his total stake in th company by 50% at an average price of about $54. He's down on both buys.
  
• Dell Computer (NSDQ:DELL). Mr. Miller almost doubled his position in 1Q06 at an average price of about $30, and is now down ~25% on that buy.
• Yahoo (NSDQ:YHOO). Added a 1/3 to his position a around $34 and now down 34% on that buy.
• XM Satellite Radio (NSDQ:XMSR). Added 25% to his position at around $17.7, now down 34% on that buy.

Now we can look at some recent Miller buys which have just tread water so far. Perhaps one can get in now at the same price. Two big names stand out:

• American International Group (NYSE:AIG). Opened a position at $67 early in the year, then increased it by mid-year at about $62. Now up 8% from the second buy, but AIG's current price still just below Mr. Miller's first buy price.
• General Electric (NYSE:GE). Opened a position early in the year at around $34, then added 192% more shares to the position  in 2Q06 at around $34 again.  GE currently trades about 5% above these entry points. Lazy fund managers looking for holdings could probably just follow Bill Miller's cue here.

There are of course many Bill Miller winners this year as well. And a caveat- check the position sizes at the link above for more information, they are all quite small which means that they are part of a very diversified portfolio. But in the end, when looking for ideas, no shame in checking out what the big boys are buying...

[Disclosure: the author is long shares of AIG]

Comments

[wcw]

Funny, I was just wondering when to start shorting homebuilders again. I was thinking the day before GDP might find them up a few percent from today. Turns out the census bureau that day releases their housing vacancy report for 06Q3, which might be pretty ugly in the for-sale-only vacancies.

FD: no positions in any of these names, though I was briefly long Dell, took a small loss, and moved on.