Embattled daily deals site Groupon Inc. (NASDAQ: GRPN), whose shares have been under immense pressure due to slowing growth rate and flagging revenue from international markets, received a tremendous boost last week after globally renowned “value investor”, Bill Miller gave the Company surprising endorsement.
Speaking to CNBC’s “Squawk Box” on Friday, Miller said that he “he liked” the stock, adding (he was) “more attracted to stuff that has warts on it and hair and all that kind of stuff.”
Miller, who manages portfolio of the Legg Mason Opportunity Trust Fund, a fund which returned 40% in 2012 compared to 13.4% return offered by S&P 500, believed that ousted Groupon’s Chief Executive was a “smart guy”, who did a commendable job in laying the foundation of the company. However, he added that business must have been very convoluted for him to manage, according to CNBC.
While investors have been dumping Groupon shares, Miller presented a strong case in favor of beleaguered site. Speaking to “Squawk Box”, Miller said, “Groupon’s got a $1.2 billion of cash. They have no debt,” adding that opportunity is tremendous (low valuation) amid low expectation. “The Stock is very cheap” said Miller.
Miller said that he average cost for Groupon stock would be $5 a share, according to CNBC.
Meanwhile, Miller also said that he liked tech giant, Apple Inc.’s (NASDAQ: AAPL) stock at the current level.
Although Apple’s stock, which hit its all-time-time high level last September, has come under scrutiny in the recent past as investors begin to question its ability to innovate, Miller thinks the iPhone maker’s fundamentals are good and the stock’s battering has been more to do with too much pessimism.
“The market has gotten obsessive about the quarter,” without paying attention to Apple’s attractive valuation said Miller. “Valuation has been completely lost on people,” added Miller while speaking to “Squawk Box”.
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