Bill Miller Finds His Sea Legs

Is Legg Mason's Bill Miller back on track?

He has just posted one of his best months in years; over the last four weeks his Value Trust fund (LMVTX) is up 6.07%, just missing out on a top decile performance against his peers.

A month ago winds of change began to blow, and I upgraded Bill from the doghouse;

March 18th
His performance has been absolutely dreadful, but I think he will start to outperform, or at least closer to median, again. His lousy companies are finally priced right, and his financial bets have had all the blood drained out of them.....Its Miller time.

The financial media crowned Miller the King of Mutual Fund managers at the turn of the century, but anyone placing money with him after 2001 does not have much to show for the faith the journalists showed in him. Miller's overweights in the consumer and financial sector had the stuffing kicking out of them until mid-March, and his numbers seem to be only as good as these stocks, despite a top 10 position in Google; tomorrow's earnings release from UnitedHealth (UNH-NYSE) looms large for Miller as well.

Of course, Morningstar has stuck by Miller through a period that would have likely seen them turning on nearly any other fund manager. Christine Benz has made the most of her degree in political science and Russian studies from the University of Illinois, but Morningstar has nuked investors with their recommendation to stick with Miller; Value Trust is their Chernobyl.

It is too early to call Miller’s turnaround a comeback, but it might give new CEO Mark Fetting some breathing room while he hunts for an accretive acquisition. If he can broker a deal the Street might finally warm up to the shares of Legg Mason’s (LM-NYSE). Shareholders have had little reason to celebrate, but might want to grab a beer if the stock begins to exhibit signs that the worst of the storm that has hit Baltimore’s has passed.

But there are no yachts for shareholders, and many fund investors, of Legg Mason.

Yeah Baby, It’s Miller Time
1440 Wall Street

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The content contained in this blog represents the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author. No Position

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