| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 22.41% | 8.39% | - |
Miller Value Partners argues that value and small-cap stocks are entering a multi-year outperformance cycle after a decade of underperformance. The firm's Deep Value Strategy returned 8.39% net in Q1 2026, significantly outperforming benchmarks as value stocks outperformed growth across all market cap segments. The manager identifies several structural headwinds for growth stocks, including record concentration in passive indexes, private credit market stress, circular AI partnerships reminiscent of late 1990s tech deals, and hyperscalers shifting to capital-heavy models. With nearly 35% of the S&P 500 trading above 10x price-to-sales and small caps representing only 3% of market weight versus 6% historically, extreme valuation gaps persist. The strategy focuses on turnaround situations and mispriced cyclicals, with concentrated holdings in companies like Nabors Industries, JELD-WEN, Conduent, Crescent Energy, and Bloomin Brands. These companies trade at fractions of normalized free cash flow yields despite having multi-billion dollar revenue bases and multiple value creation drivers through operational improvements and asset monetization.
Miller Value Partners believes value and small-cap stocks are positioned for a multi-year outperformance cycle after 10+ years of underperformance, driven by extreme valuation gaps, market concentration risks in growth stocks, and improving earnings prospects for smaller companies.
The manager expects conditions favoring a strong potentially multi-year outperformance cycle for low valuation and small caps, with significant embedded long-term potential in their concentrated holdings of companies with multiple value creating drivers.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 13 2026 | 2026 Q1 | BLMN, CNDT, CRGY, JELD, NBR | Concentration, energy, small caps, Turnarounds, value |
NBR JELD CNDT CRGY BLMN |
Miller Value Partners sees value and small-caps entering a multi-year outperformance cycle after extreme underperformance. Their concentrated Deep Value Strategy returned 8.39% in Q1 by investing in deeply discounted turnaround situations trading at fractions of normalized cash flows. With growth stocks facing structural headwinds and valuation gaps at historical extremes, conditions favor patient capital in mispriced cyclicals. |
| Jan 14 2026 | 2025 Q4 | BTC-USD, STGY | Bitcoin, Economic Growth, Fed, liquidity, monetary policy, rates, small caps, value | - | The Fed's shift from quantitative tightening to $40 billion monthly asset purchases is more significant than headlines suggest, creating favorable conditions for small- and mid-cap value strategies. With inflation below target and positive yield curve signals, this accommodative stance should drive economic expansion and benefit discounted value names and Bitcoin exposure. |
| Oct 15 2025 | 2025 Q3 | AAPL, BFH, MSFT, NBR | AI, deep value, earnings, Recovery, small caps, technology, valuation, value |
NBR BFH |
Miller Value Partners sees compelling opportunity in small cap value stocks trading at 70% discount to S&P 500 while Technology sector approaches dot-com bubble valuations at 34.8% index weighting. Small caps emerging from earnings recession with 2026 growth expected to exceed large caps. Deep Value Select strategy gained 26.5% in Q3 2025, positioning for multi-year outperformance cycle. |
| Jul 21 2025 | 2025 Q2 | GCI, JELD, NBR, NYT, TPC | Construction, deep value, energy, Media, small caps, Turnarounds, value |
GCI TPC JELD NBR GCI TPC JELD NBR |
Small caps are at a 90-year extreme underperformance versus large caps, creating a generational opportunity. The Deep Value Strategy targets mispriced turnarounds in overlooked small companies trading at extreme discounts. Despite recent underperformance, the manager sees multiple catalysts including Fed rate cuts, tax relief, and deregulation supporting a multi-year small cap outperformance cycle. |
| Apr 14 2025 | 2025 Q1 | DOOR, GCI, GTN, JELD, NBR, NYT, OC, QUAD, UNFI | Media, opportunity, small caps, uncertainty, value, volatility |
GTN GCI NBR JELD |
Deep value manager sees Q1's -12.8% drawdown as creating exceptional long-term opportunities in small cap stocks trading at extreme valuations. With policy uncertainty at 2020 levels and expensive stocks reaching record highs, historical patterns suggest overlooked value names should outperform significantly. Portfolio holdings average 1.5x cash flow with 30%+ free cash flow yields. |
| Jan 13 2025 | 2024 Q4 | MSTR | Bitcoin, crypto, Currency, small cap, technology, value | - | Miller Value Partners maintains concentrated exposure to small- and mid-cap value stocks plus strategic Bitcoin positions. The firm views Bitcoin as superior to fiat currency due to predetermined supply and energy-backed creation, with institutional adoption accelerating through ETFs holding $100B+ assets. Generational valuation discrepancies favor their small-cap value focus over large-cap growth strategies. |
| Oct 10 2024 | 2024 Q3 | GCI, NBR, QUAD, UNFI | Concentration, energy, Media, rates, small caps, valuation, value |
GCI UNFI NBR QUAD |
Deep Value Select returned 4.6% in Q3, with year-to-date gains of 20.13%. Manager sees current market concentration mirroring 1999-2000 bubble, positioning thirteen small-cap holdings for outperformance as Fed rate cuts catalyze rotation from expensive mega-caps to undervalued smaller companies. Portfolio trades near six-year valuation lows despite multiple transformation stories across holdings. |
| Jul 2 2024 | 2024 Q2 | GCI, GTN, NBR, NYT, UNFI | Active Share, Concentration, deep value, Energy Services, Food Distribution, Media, small caps, value | - | Miller Deep Value Select delivered 12.84% Q2 returns through concentrated exposure to severely discounted small caps trading at 2x cash flow and 30%+ free cash flow yields. Manager increased positions in beaten-down names while benefiting from Gannett's digital transformation success. Small cap valuations at late-1990s lows with earnings reacceleration expected create compelling risk-adjusted opportunities. |
| Apr 26 2024 | 2024 Q1 | FOSL, GTN, LNC, TPC | Concentration, Earnings Yield, infrastructure, small caps, undervalued, value |
TPC GTN FOSL LNC |
Miller Deep Value targets concentrated small-cap value opportunities amid extreme market concentration. Portfolio holds undervalued companies with double-digit earnings yields including infrastructure beneficiary Tutor Perini and media play Gray Television. Small caps at 4% of market versus 8% historical average creates outperformance setup as earnings growth accelerates and valuations expand from current discounts. |
| Jan 19 2024 | 2023 Q4 | BCC, BKE, JXN, MED, OGN, RILY, WAL | dividends, high yield, income, interest rates, Regional Banks, value |
WAL BKE JXN BCC |
Miller Income Strategy outperformed in Q4 with 11.07% returns driven by regional bank Western Alliance and dividend-paying retailers. Favorable macro backdrop includes declining inflation expectations, potential Fed rate cuts, and low volatility. Portfolio adjustments eliminated underperforming positions while adding wood products and media debt. Current conditions suggest continued market upside potential. |
| Oct 17 2023 | 2023 Q3 | AXL, BFH, CHS, FOSL, GTN | - | - | |
| Jul 14 2023 | 2023 Q2 | GCI, GTN, NBR, NVDA, QUAD, WAL | Banking, Concentration, Media, small caps, technology, value |
GCI QUAD NBR WAL GTN |
Deep Value strategy declined 2.5% in Q2 as extreme market concentration continued with Top 5 S&P stocks generating 70% of index returns. Strategy focuses on mispriced cyclicals trading at 40-90% discount to growth stocks. Added Western Alliance bank and Gray Television broadcast company. Manager sees attractive long-term opportunity in unloved small cap value stocks at historical discount levels. |
| Apr 14 2023 | 2023 Q1 | GCI, MHO, NBR | Banking, energy, Homebuilders, rates, Recession, small cap, technology, value |
BXC|IMKTA|MHO NBR GCI |
Deep Value strategy down 3.6% as markets crowded into growth amid banking stress. Value and small caps trading at extreme historical discounts with small caps at 0.7x large caps. Portfolio concentrated in mispriced cyclicals like homebuilder M/I Homes and energy driller Nabors. Manager expects attractive returns as recession fears subside and markets broaden out from current concentration. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
ValueValue stocks significantly outperformed growth across all market cap segments in Q1, with Russell 1000 Value beating Growth by 11.88%. The manager sees this as the beginning of a potentially multi-year outperformance cycle for low valuation equities after 10+ years of underperformance. |
Value Growth Outperformance Cycle Multiples |
Small CapsSmall caps represent only 3% of the equity market versus their long-term average of 6%. The manager believes market reallocation from large to small caps could nearly double small cap representation and provide significant tailwinds for returns. |
Small Caps Market Weight Reallocation Underweight Opportunity | |
OilThe strategy benefited from energy sector investments, particularly Nabors Industries and new position Crescent Energy. Both companies are positioned to benefit from higher commodity prices and industry supply challenges that the manager believes make a return to lower prices unlikely. |
Oil Energy Commodity Prices Supply Drilling | |
| 2025 Q4 |
DividendsThe fund focuses on carefully selected quality companies with strong dividend growth globally. Portfolio managers aim to provide dividend growth and consistent returns with lower volatility over the long-term. The fund seeks high-quality, dividend-paying companies that can generate strong, consistent returns. |
Dividend Growth Quality Companies Income Yield Distribution |
AIAI infrastructure demand remained strong with SK Hynix benefiting from robust memory demand. However, concerns emerged about AI potentially hurting parts of RELX's business, leading to position exit. IT rotation and year-end softness drove sentiment weakness in AI pockets. |
Artificial Intelligence Memory Infrastructure Technology | |
TechnologyThe fund had underweight positions in information technology sector which contributed to underperformance. Technology is expected to continue being a market driver, with the team owning industry leaders at the faster end of the monetization curve while maintaining robust valuation approach. |
IT Sector Semiconductors Innovation Valuation | |
| 2025 Q3 |
ValueManager emphasizes extremely wide valuation spreads between low valuation equities and longer duration/technology stocks. Deep Value Select strategy trades at greater than 70% discount to S&P 500 Index with attractive asymmetric return potential. Low valuation equities are being overlooked and represent a timely opportunity. |
Valuation Discount Spreads Asymmetric Overlooked |
Small CapsSmall caps resumed upward momentum and reached new highs, breaking 2021 price levels after four-year pause. Small cap sector emerging from multi-year earnings recession with expected earnings growth ahead of larger companies during 2026. Future interest rate cuts, deregulation and $150M incremental tax savings provide tailwinds to smaller company profitability. |
Earnings Recovery Tailwinds Outperformance Momentum | |
AIWhile marketplace focuses on Technology and AI companies, smaller companies may end up being biggest long-term beneficiaries from utilizing AI and other technological advancements to enhance business productivity and profitability. Technology and AI-related companies represent longest duration equities with excessive exuberance building similar to late 1990s. |
Productivity Technology Enhancement Duration Beneficiaries | |
| 2025 Q2 |
Small CapsSmall caps are at a 90-year extreme underperformance versus large caps, creating a generational opportunity. The current cycle favoring large caps is now in its 15th year, one of the longest on record. Historical patterns suggest small caps are poised for a multi-year outperformance cycle. |
Russell 2000 Size Factor Underperformance Valuation Cycle |
ValueExtreme valuation spreads exist between large and small caps, with Russell 1000 versus Russell 2000 price-to-sales ratios well above Covid 2020 and 1999-2000 peak levels. The earnings spread between expensive large cap growth and cheap small cap value is near 18%, historically followed by 13%+ annualized relative returns. |
Price-to-Sales Earnings Yield Valuation Spreads Russell 1000 Russell 2000 | |
EnergyNabors Industries represents a transformation story in drilling technology with over 450 patents and industry-leading automation. The company trades at less than one times forward cash flow despite significant free cash flow generation potential and debt reduction opportunities. |
Drilling Automation Technology Free Cash Flow Transformation | |
| 2025 Q1 |
ValueManager emphasizes deep value investing approach, highlighting that lower valuation securities continue to have lower representation in passive indexes and are under-owned. Portfolio holdings are trading at historically attractive valuations with average less than 1.5x cash flow, price to sales less than 0.2x and normalized earnings and free cash flow greater than 30%. |
Value Undervalued Multiples Earnings Cash Flow |
Small CapsStrong focus on small cap opportunities, noting that small caps have historically outperformed during the second half of recessions with double digit positive returns on average. Small caps relative valuation is back near historical extremes and expected to benefit from greater tax relief and further deregulation. |
Small Caps Outperformance Valuation Tax Relief Deregulation | |
VolatilityManager views current market volatility as creating attractive long-term buying opportunities. Price volatility is welcomed by long-term oriented value investors as it can create very attractive investment opportunities when market prices fall sharply below fundamental business values. |
Volatility Opportunity Market Timing Drawdown Recovery | |
MediaSignificant exposure to media companies including Gray Media, Gannett, and comparisons to New York Times. Focus on digital transformation opportunities and companies generating strong free cash flow despite secular headwinds in traditional media businesses. |
Media Digital Transformation Broadcasting Publishing | |
| 2024 Q4 |
CryptoBitcoin represents a thermodynamically sound unit of account for capital governance built on a more stable process than fiat currency. The technology's first-mover advantage and causal ambiguity make it difficult for another proof-of-work protocol to catch it. Markets currently ascribe nearly $2 trillion worth of value to Bitcoin, with ETFs holding over $100B in assets. |
Bitcoin Cryptocurrency Digital Assets Store of Value Decentralized |
ValueThe firm focuses on small- and mid-cap value stocks, benefiting from a generational discrepancy in valuations between large caps/growth and small caps/value. They view Bitcoin as a compelling value opportunity despite having no traditional financial metrics. |
Small Cap Mid Cap Valuation Undervalued Opportunity | |
| 2024 Q3 |
ValueManager emphasizes wide valuation spreads between expensive and cheap stocks, with the least expensive decile trading at significant discounts with attractive 15% earnings yields. Current market concentration and valuation levels mirror 1999-2000 period, suggesting potential for value outperformance as spreads narrow over time. |
Valuation spreads Earnings yield Price-to-sales Market concentration |
Small CapsSmall cap value significantly outperformed large cap growth from July 11th through quarter end, with Russell 2000 Value up 10.16% versus Russell 1000 Growth down 1.69%. Small caps are emerging from earnings recession unlike large caps at peak margins, positioning them for relative earnings improvement. |
Russell 2000 Earnings recession Relative performance Market cap rotation | |
RatesFederal Reserve's 50 basis point rate cut and pivot to easing cycle represents a key catalyst for sustained market cycle favoring smaller caps and value stocks. Historically, rate easing cycles lead to steeper yield curves and valuation spread narrowing. |
Federal Reserve Rate cuts Yield curve Monetary policy | |
| 2024 Q2 |
ValueManager focuses on neglected and under-followed parts of the marketplace where market expectations remain extremely low, seeking wide price-to-value gaps. The lowest valuation subset of the market has earnings yields multiples higher than the most expensive securities. Portfolio holdings trade at near 2x cash flow, price to sales less than 0.2x, and normalized earnings and free cash flow yields greater than 30%. |
Deep Value Valuation Earnings Yield Price-to-Sales Cash Flow |
Small CapsSmall caps remain significantly out of favor with relative valuation multiples reset to lows last seen in the late 1990s market bifurcation. Manager sees opportunity for small cap earnings to reaccelerate over the coming 6 to 18 months. Small caps are now less than 4% of the total equity market, last seen in the 1930s, creating potential tailwinds from any reallocation. |
Small Cap Valuation Earnings Market Share Reallocation | |
MediaGannett represents a digital transformation story with digital revenues expected to grow 10%+ over the next couple years, reaching 42% of total revenue. Gray Television benefits from strong local TV market positions and expected political advertising ramp in the back half of 2024. Both companies offer significant free cash flow generation potential. |
Digital Transformation Political Advertising Local TV Free Cash Flow Media | |
| 2024 Q1 |
ValueManager emphasizes significant valuation discounts in value stocks versus growth, with value indexes trading at 40-90% discounts to longer duration equity indexes. Small cap value particularly attractive with relative valuations near 45-year lows versus large caps. Strategy focuses on double-digit earnings and free cash flow yields in undervalued securities. |
Value Discounts Earnings Yield Free Cash Flow Undervalued |
Small CapsSmall caps experienced earnings recession in 2023 but earnings growth expected to improve in back half of 2024. Small caps represent only 4% of total equity market, half their long-term average, creating opportunity for significant outperformance. Manager sees reaccelerating earnings growth and potential valuation expansion as amplifying future returns. |
Small Caps Earnings Growth Underowned Outperformance Valuation Expansion | |
Infrastructure SpendingTutor Perini positioned to benefit from $1.2T federal infrastructure law over next couple years. Covid outbreak caused delays in larger Civil contracts but company's sales pipeline appears rebuilt through ongoing new business wins. Infrastructure spending represents key catalyst for portfolio holding. |
Infrastructure Federal Spending Civil Contracts Pipeline Catalyst | |
| 2023 Q4 |
Regional BanksWestern Alliance Bancorp was the top contributor with strong deposit growth and capital ratios. The bank reported deposits rising 6.5% sequentially to $54.3B with 82% insured and collateralized, while CET1 ratio expanded to 10.6%. |
Regional Banks Deposits Capital Ratios Banking |
DividendsThe Buckle maintained its quarterly dividend and declared a special cash dividend of $2.50/share, implying a twelve-month yield of approximately 8.2%. Jackson Financial returned $123MM to shareholders via dividends and share repurchases. |
Dividends Special Dividends Yield Capital Return | |
RatesFed officials are discussing timing and extent of interest rate cuts, with Fed futures markets implying greater than 50/50 chance of a cut before end of Q1. This would be the first rate cut in over 40 years following two consecutive quarters of GDP growth above 4.5%. |
Interest Rates Fed Policy Rate Cuts Monetary Policy | |
| 2023 Q2 |
ValueManager emphasizes extreme valuation spreads between growth and value stocks, with value factors delivering negative returns in 2023. Small Cap Value trades at significant 40-90% discount to longer duration equities, close to Covid lows. Deep Value strategy holdings experienced significant valuation compression during the quarter. |
Valuation Spreads Discount Compression |
Small CapsRussell 2000 has been in extended bear market with negative rolling 12-month returns for 17 months, a rare historical event. Small caps as percent of total equity market approaching 4%, almost half their long-term average. Historical analysis shows forward 1-year returns averaged greater than 25% after similar periods. |
Russell 2000 Bear Market Historical Opportunity | |
AITechnology sector benefits from Artificial Intelligence optimism, but manager warns that AI benefits may take longer to play out than market expectations. Sector discounting significant optimism for AI improvements, creating risk if recovery is less than expected or timeline extends. |
Technology Optimism Timeline Expectations | |
MediaInitiated position in Gray Television, second largest broadcast company reaching 36% of US households. Company positioned for earnings improvement from political advertising reacceleration and favorable retransmission contract renewals. New Assembly studio asset expected to generate meaningful free cash flow and reduce cyclicality. |
Broadcasting Political Retransmission Studio | |
| 2023 Q1 |
ValueManager emphasizes value stocks are trading at wide valuation discounts and appear to be discounting significant recession fears. Value outperformed Growth by more than 20% in 2022 but lagged in Q1 2023 as markets crowded into longer duration equities. The most expensive decile posted negative returns while the least expensive was up double-digits. |
Valuation Discount Outperformance Cyclical Price-to-value |
Small CapsSmall caps are trading at extreme discounts versus large caps at 0.7x, only seen once before during the Tech bubble. Small cap trading at depressed historical valuations relative to large cap. Manager believes smaller-cap equities will see attractive returns in the not-too-distant future as markets broaden out. |
Discount Valuation Outperformance Historical Opportunity | |
HomebuildersM/I Homes was the largest positive contributor, up over 30% during the quarter. Positive demographics and lack of housing supply over the past 10 years provides a very favorable long-term supply/demand picture that should shorten the current downturn. Manager sees attractive long-term reward/risk investment opportunity. |
Supply Demand Demographics Housing Recovery | |
EnergyNabors share price was negatively impacted from the recent pullback in energy prices. The company is well positioned to benefit from ongoing customer demand for their global high spec rig fleet. Manager believes favorable supply/demand environment should continue to be supportive of higher asset utilization and pricing power. |
Drilling Utilization Pricing Supply Demand |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Apr 13, 2026 | Fund Letters | Miller Value Partners Deep Value Strategies | NBR | Nabors Industries | Oil & Gas Drilling | Oil & Gas Drilling | Bull | New York Stock Exchange | cash flow, Commodity Exposure, debt reduction, Drilling Technology, Energy Services, Middle East, North America, Oil & Gas Drilling, Value | Login |
| Apr 13, 2026 | Fund Letters | Miller Value Partners Deep Value Strategies | JELD | JELD-WEN | Building Products & Equipment | Building Products | Bull | New York Stock Exchange | Building Products, Distribution, Doors, Europe, Housing, North America, Real Estate, transformation, turnaround, Value, Windows | Login |
| Apr 13, 2026 | Fund Letters | Miller Value Partners Deep Value Strategies | CNDT | Conduent | Information Technology Services | IT Consulting & Other Services | Bull | NASDAQ | Business Process Services, Cost Reduction, Digital Solutions, Fortune 100, Government Services, IT services, new CEO, transformation, Value | Login |
| Apr 13, 2026 | Fund Letters | Miller Value Partners Deep Value Strategies | CRGY | Crescent Energy | Oil & Gas E&P | Oil & Gas Exploration & Production | Bull | New York Stock Exchange | Acquisitions, Commodity Exposure, energy, Free Cash Flow, mineral rights, Oil & Gas E&P, Permian Basin, royalties, Value | Login |
| Apr 13, 2026 | Fund Letters | Miller Value Partners Deep Value Strategies | BLMN | Bloomin Brands | Restaurants | Restaurants | Bull | NASDAQ | Casual Dining, Consumer Discretionary, Outback, Remodeling, Restaurants, Starboard Value, Steakhouse, technology, turnaround, Value | Login |
| Oct 15, 2025 | Fund Letters | Daniel Lysik | NBR | Nabors Industries Ltd. | Energy | Oil & Gas Drilling | Bull | NYSE | Asset Sale, Automation, Contracts, deleveraging, Drilling, EV/EBITDA, FCF yield | Login |
| Oct 15, 2025 | Fund Letters | Daniel Lysik | BFH | Bread Financial Holdings, Inc. | Financials | Consumer Finance | Bull | NYSE | credit cards, Deposits, earnings yield, Normalization, Reserves, Rotce, underwriting | Login |
| Jul 21, 2025 | Fund Letters | Daniel Lysik | GCI | Gannett Co. Inc. | Communication Services | Publishing | Bull | New York Stock Exchange | cashflow, Digital, media, turnaround, valuation | Login |
| Jul 21, 2025 | Fund Letters | Daniel Lysik | TPC | Tutor Perini Corp. | Industrials | Construction & Engineering | Bull | New York Stock Exchange | backlog, construction, infrastructure, Margins, recovery | Login |
| Jul 21, 2025 | Fund Letters | Daniel Lysik | JELD | JELD-WEN Holding Inc. | Industrials | Building Products | Bull | New York Stock Exchange | Buildingproducts, Costcutting, Housing, Margins, turnaround | Login |
| Jul 21, 2025 | Fund Letters | Daniel Lysik | NBR | Nabors Industries Ltd. | Energy | Oil & Gas Drilling | Bull | New York Stock Exchange | Automation, cashflow, deleveraging, Drilling, synergies | Login |
| Jul 21, 2025 | Fund Letters | Miller Value Partners Deep Value Strategies | GCI | Gannett Co Inc | Communication Services | Publishing | Bull | NYSE | Digital transformation, Free Cash Flow, media, Publishing, turnaround, undervalued, Value | Login |
| Jul 21, 2025 | Fund Letters | Miller Value Partners Deep Value Strategies | TPC | Tutor Perini Corporation | Industrials | Construction & Engineering | Neutral | NYSE | capital allocation, Civil Engineering, construction, Cyclical Recovery, deep value, infrastructure, turnaround | Login |
| Jul 21, 2025 | Fund Letters | Miller Value Partners Deep Value Strategies | JELD | JELD-WEN Holding Inc | Industrials | Building Products | Bull | NYSE | Building Products, Cost Reduction, deep value, Free Cash Flow, Housing, manufacturing, transformation, turnaround | Login |
| Jul 21, 2025 | Fund Letters | Miller Value Partners Deep Value Strategies | NBR | Nabors Industries Ltd | Energy | Oil & Gas Drilling | Bull | NYSE | Automation, debt reduction, deep value, Digital transformation, Drilling, Free Cash Flow, Oil & Gas, technology | Login |
| Apr 14, 2025 | Fund Letters | Miller Value Partners Deep Value Strategies | GTN | Gray Media | Communication Services | Broadcasting | Bull | NYSE | broadcasting, debt reduction, Free Cash Flow, Local Advertising, media, Political advertising, Retransmission, Television | Login |
| Apr 14, 2025 | Fund Letters | Miller Value Partners Deep Value Strategies | GCI | Gannett | Communication Services | Publishing | Bull | NYSE | antitrust, Cost Reduction, Digital transformation, Free Cash Flow, media, Newspapers, Publishing, Subscriptions | Login |
| Apr 14, 2025 | Fund Letters | Miller Value Partners Deep Value Strategies | NBR | Nabors Industries | Energy | Oil & Gas Drilling | Bull | NYSE | acquisition, Energy Services, Free Cash Flow, Integration, Lateral Drilling, Oil & Gas Drilling, technology | Login |
| Apr 14, 2025 | Fund Letters | Miller Value Partners Deep Value Strategies | JELD | JELD-WEN | Industrials | Building Products | Bull | NYSE | Automation, Building Products, Cost Reduction, Doors, Housing, manufacturing, Real Estate, transformation, Windows | Login |
| Oct 10, 2024 | Fund Letters | Miller Value Partners Deep Value Strategies | GCI | Gannett Co Inc | Communication Services | Publishing | Bull | NYSE | antitrust litigation, Digital transformation, Free Cash Flow, media, Publishing, turnaround, Value | Login |
| Oct 10, 2024 | Fund Letters | Miller Value Partners Deep Value Strategies | UNFI | United Natural Foods Inc | Consumer Staples | Food Distributors | Bull | NYSE | food distribution, Natural Foods, operational efficiency, Six Sigma, transformation, turnaround, Value | Login |
| Oct 10, 2024 | Fund Letters | Miller Value Partners Deep Value Strategies | NBR | Nabors Industries Ltd | Energy | Oil & Gas Drilling | Bull | NYSE | debt reduction, energy, Free Cash Flow, Joint venture, Middle East, Oil & Gas Drilling, Saudi Aramco, Value | Login |
| Oct 10, 2024 | Fund Letters | Miller Value Partners Deep Value Strategies | QUAD | Quad/Graphics Inc | Communication Services | Commercial Printing | Bull | NYSE | asset sales, Commercial Printing, Fortune 500, Free Cash Flow, Marketing Services, transformation, turnaround, Value | Login |
| Apr 11, 2024 | Fund Letters | Miller Value Partners Deep Value Strategies | TPC | Tutor Perini Corporation | Industrials | Construction & Engineering | Bull | NYSE | Cash Flow Recovery, Civil Engineering, construction, Federal Spending, infrastructure, turnaround, Value | Login |
| Apr 11, 2024 | Fund Letters | Miller Value Partners Deep Value Strategies | GTN | Gray Television Inc | Communication Services | Broadcasting | Bull | NYSE | Atsc 3.0, broadcasting, deleveraging, digital advertising, Free Cash Flow, Local Television, Political advertising, Value | Login |
| Apr 11, 2024 | Fund Letters | Miller Value Partners Deep Value Strategies | FOSL | Fossil Group Inc | Consumer Discretionary | Textiles, Apparel & Luxury Goods | Bull | NASDAQ | balance sheet, Cost Reduction, fashion accessories, Free Cash Flow, Micro-cap, transformation, turnaround, Value | Login |
| Apr 11, 2024 | Fund Letters | Miller Value Partners Deep Value Strategies | LNC | Lincoln National Corporation | Financials | Life & Health Insurance | Bull | NYSE | balance sheet, financial services, Free Cash Flow, life insurance, multiple expansion, ROE, turnaround, Value | Login |
| Jan 10, 2024 | Fund Letters | Miller Value Partners Deep Value Strategies | WAL | Western Alliance Bancorp | Financials | Regional Banks | Bull | NYSE | banking, capital ratios, deposit growth, net interest margin, regional bank, tangible book value | Login |
| Jan 10, 2024 | Fund Letters | Miller Value Partners Deep Value Strategies | BKE | The Buckle | Consumer Discretionary | Specialty Retail | Bull | NYSE | Apparel, cash generation, Consumer Discretionary, dividend yield, Free Cash Flow, Specialty retail | Login |
| Jan 10, 2024 | Fund Letters | Miller Value Partners Deep Value Strategies | JXN | Jackson Financial Inc | Financials | Life & Health Insurance | Bull | NYSE | Annuities, capital returns, fee income, life insurance, RILA, share repurchases | Login |
| Jan 10, 2024 | Fund Letters | Miller Value Partners Deep Value Strategies | BCC | Boise Cascade | Materials | Forest Products | Bull | NYSE | balance sheet, Building materials, Cyclical, Forest Products, Value, Wood Products | Login |
| Jul 14, 2023 | Fund Letters | Miller Value Partners Deep Value Strategies | GCI | Gannett Co Inc | Communication Services | Publishing | Bull | NYSE | Anti-trust, Cost Reduction, Digital transformation, Equity, media, Publishing, turnaround | Login |
| Jul 14, 2023 | Fund Letters | Miller Value Partners Deep Value Strategies | QUAD | Quad/Graphics Inc | Communication Services | Publishing | Bull | NYSE | business transformation, Digital Solutions, Enterprise software, Equity, Marketing Services, Printing, Value | Login |
| Jul 14, 2023 | Fund Letters | Miller Value Partners Deep Value Strategies | NBR | Nabors Industries Ltd | Energy | Oil & Gas Drilling | Bull | NYSE | Cyclical, debt reduction, Drilling Services, energy transition, Equity, Free Cash Flow, Oil & Gas | Login |
| Jul 14, 2023 | Fund Letters | Miller Value Partners Deep Value Strategies | WAL | Western Alliance Bancorporation | Financials | Regional Banks | Bull | NYSE | Commercial Banking, deposit growth, Equity, regional banks, Rotce, underwriting, Value | Login |
| Jul 14, 2023 | Fund Letters | Miller Value Partners Deep Value Strategies | GTN | Gray Television Inc | Communication Services | Broadcasting | Bull | NYSE | broadcasting, Equity, Film Studio, Free Cash Flow, Political advertising, Retransmission, Television | Login |
| Apr 18, 2023 | Fund Letters | Miller Value Partners Deep Value Strategies | BXC|IMKTA|MHO | M/I Homes | Consumer Discretionary | Homebuilding | Bull | NYSE | Cyclical, Demographics, homebuilder, Housing supply, Midwest, Real Estate, Southeast, Value | Login |
| Apr 18, 2023 | Fund Letters | Miller Value Partners Deep Value Strategies | NBR | Nabors Industries | Energy | Oil & Gas Drilling | Bull | NYSE | Cyclical, debt reduction, energy transition, High-Spec Rigs, International, Oil & Gas Drilling, Saudi Aramco, Value | Login |
| Apr 18, 2023 | Fund Letters | Miller Value Partners Deep Value Strategies | GCI | Gannett | Communication Services | Publishing | Bull | NYSE | debt reduction, digital marketing, Digital transformation, media, Publishing, Real Estate Monetization, Subscription, turnaround | Login |
| TICKER | COMMENTARY |
|---|---|
| NBR | During the quarter, the largest positive contributor was Nabors Industries (NBR), which was up 58%. Nabors successfully completed the sale of their Quail Tools business segment, which significantly improved the company balance sheet. Nabors net debt leverage ended the year near 1.8x. Over the past 12 months the company has reduced total debt by more than $350M, eliminating all debt maturities before 2029. Nabors looks well positioned to benefit over the coming years from higher commodity prices, an eventual pick-up in North America rig demand, expansion of their low capital-intensive and higher margin drilling solutions and scaling their 50-rig program with SANAD. The company is also well positioned for any incremental global drilling. Nabors has been a long-term partner with leading Integrated Energy companies, historically having more than 10 rigs working in Venezuela. While Nabors has a sizable Middle East presence which poses some risk with the ongoing Iran conflict, to our knowledge the company has not reported material disruption to date. Near-term risks would also be unexpected return to lower commodity price environment which we believe is low given the ongoing industry supply challenges and a slower than expected recovery in N.A. rig market. Our view of Nabors' long-term upside potential is still multiples of the current share price if the company executes on the factors discussed above, with the shares are still trading near 2x cash flow and more than 40% normalized free cash flow yield. |
| JELD | Our two largest detractors during the quarter were JELD-WEN (JELD) and Conduent (CNDT), which were down 49% and 33% during the quarter, respectively. Both companies' share prices are at deep discounts to what we believe is their long-term fundamental value; we have recently increased our positions in both holdings. JELD-WEN, is a leading North American and European manufacturer and distributor of interior and exterior doors and windows, undertaking a multi-year transformation. Their plan has similarities to Masonite's successful transformation ten years ago. Late last year JELD-WEN hired a senior operational executive who was previously at Masonite that will help enhance the transformation plan. The company is undertaking a significant cost reduction program, reducing their North American headcount by more than 10%. In addition, management is phasing in price increases during the second quarter that should help offset inflation and tariff pressures and improve margins later in the year. The company has an extensive asset base (e.g., large real estate portfolio) which provides ongoing monetization opportunities and a margin of safety to the transformation plan. In addition, JELD-WEN North American distribution business is currently under review. Last year, Lowes paid 1.35x revenue to acquire distributor Foundation Building Materials, which in our view suggests the market may be undervaluing JELD-WEN's distribution business relative to the current market cap. JELD-WEN also has leading market share positions in their European operation, which generates more than $1B in annual revenue. Their European business provides additional operational leverage to a housing recovery and potential monetization proceeds over time. We believe JELD-WEN current share price may reflect a fraction of its long-term fundamental value, with current market cap near $100M versus annual revenues >$3B, under 1x normalized free cash flow yield. With the housing and R&R (repair and restoration) market at an extended trough, near-term revenue headwinds may persist. However, we believe management is making the right enhancements to the business and believe further success on their multi-year transformation plan has the potential to unlock significant equity value over time. |
| CNDT | Conduent delivers digital business solutions and services to 50% of Fortune 100 clients and 46 of 50 states. The company is in the midst of a multi-year transformation. During Q1, the company announced a new CEO, Harsha Agadi, with historical transformation success. Harsha plans on accelerating cost reductions, enhancing core client economics and new business pipeline conversion. He is looking for structural changes to enhance company free cash flow generation, using non-core asset sales and better cash generation to further accelerate future debt reduction. We also believe his incentives are aligned with the transformation plan with 1M shares that fully vest in three years subject to a share price in excess of $5/share. Success on the transformation supports Conduent revenues >$3B and double-digit EBITDA margins over time. Conduent has a sizable government business which could experience near-term disruption from additional government closings. In addition, with the recent management change there are some near-term risks that transformation plan changes will take some time to scale which could cause some short-term headwinds for profitability. However, we believe that current share price discounts this market fear. Conduent shares look significantly mispriced, less than 2x normalized EV/EBITDA, versus publicly traded peers at 8 to 10x. |
| CRGY | Early in the quarter, we initiated a position in Crescent Energy (CRGY), a top 10 domestic Energy and Exploration (E&P) company. While a small market cap at time of purchase, Crescent's significant asset base/free cash flow power should support a mid-cap market cap over time. Crescent's share price was down 50% over the past year due to weak commodity prices and the completion of Vital Energy acquisition which brought debt leverage to the higher end of the company's historical range (1.5x). Management has a successful track record of buying assets at a significant discount to their long-term value, improving acquired company operations, removing excess costs, driving down development costs, and enhancing well productivity. Vital brings Crescent into the Permian basin with low decline production 10+ year inventory. The company also recently hired an experienced operator who successfully built out Pioneer Natural Resources Permian Assets. Crescent's asset base has significant flexibility to move within liquids (oil, gas, and NGL), focusing on best capital return potential and maximizing free cash flow over the cycle. Management has also successfully built a mineral asset and royalty business that generates $160M of EBITDA; current private and public transactions have been at 7-11x EBITDA multiples which in our view suggests significant $1-1.5B of underlying value. With acquisitions as a core part of the long-term strategy, there will always be risk of integration challenges. However, the company has been very successful in acquiring assets over the past 10 years and their underwriting is done with conservatism focusing on quick payback and accretion to free cash flow and NAV. With the recent increase in commodity prices and Vital merger synergies, the company may be positioned to deliver $1B+ in annual free cash flow over the next couple of years, although actual results may differ materially. In addition, any unexpected return to lower commodity price environment is an ongoing risk however we believe this is low given the ongoing industry supply challenges. In our view, Crescent shares remain very attractive near 2x cash flow and what we estimate to be a normalized earnings and free cash flow yield near 30%. |
| BLMN | We also initiated a position in Bloomin Brands (BLMN), a company in the midst of a multi-year transformation. The company has $4B in revenue focused on the casual dining portion of the restaurant market. Bloomin Brands' two largest banners – Outback and Carrabbas – are leading brands in the large steakhouse and Italian segments of the market. The company's smaller growing brands are Bonefish Grille and Flemings. Two years ago, Starboard Value took a 9%+ equity stake, highlighting the parallels to their previous successful turnaround in a casual dining space. Darden Restaurants has a very similar portfolio of brands as Bloomin Brands (Longhorn Steakhouse, Olive Garden and Capital Grille). Darden's former successful Chief Operating Officer has been a recent addition to the Bloomin Brands board. The company also hired a new CEO who has embraced Starboards turnaround plan focusing on improving the Outback banner, enhancing the company balance sheet, and reinvesting back into the asset base. The company has been investing in new systems and guest-facing technology to reduce check-out time and gather consumer feedback. Late last year, management rolled out a new steak line-up at Outback and is reporting better consumer feedback and an inflection in restaurant traffic. During the upcoming year, management is using productivity savings to reinvest back into the business with a focus on improving food quality, enhancing server experience, and rolling out new marketing. In addition, management is undertaking a remodel program focused on refreshing all Outback stores by the end of 2028. Success of the transformation plan could help to drive the restaurant banners back to consistent positive comps and lead to margin improvements over time. Today Bloomin Brands' share price is 80% below their all-time high, as the company is near historical low EBITDA margins versus industry peers in the low to mid-teens. Near-term risk is ongoing revenue and margins headwinds from adverse weather and rising beef costs. Bloomin Brands low valuation appears to reflect these concerns and limited expectations on the success of the turnaround plan; forward EV/EBITDA is below 4x and price to earnings (FY2) is below 6x based on trough earnings expectations. Success on the transformation suggests normalized EBITDA at >$500M and, with only $60M of long-term maintenance capex, our view of normalized annual free cash flow is near the company current market cap. Bloomin Brands' long-term potential upside could be multiples of the current share price. |
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