Real investing involves the risk of permanent loss of capital. The securities mentioned are not an actual portfolio and are not being offered for investment as a model. Figures cited are as of date of publication and can change over time. Miller Value Partners undertakes no obligation to update these.

One of our firm’s favorite traditions is the long-running Annual Stock Contest, which provides team members and friends of the firm with a competitive incentive to generate ideas they think are likely to perform well in the year ahead. Each year, all team members, regardless of investment background or seniority, submit a fictional “portfolio” of their top ten ideas, on an equal-weighted basis over the next twelve months — no trading or closing of positions allowed.

As we’ve highlighted before, besides having fun, the point is to surface big ideas, free from the real constraints actual portfolio managers face. And the team has done especially well the past two years, with six out of eight portfolios outperforming the S&P 500 in 2023 (58.3% average return versus the market’s 26.3% return), and nine out of ten portfolios outperforming in 2024 (44.4% average return versus the market’s 25.0% return).

Last year’s winner was our COO, Justin Farrell, who put up a spectacular 80.7% return. As Justin noted, the best part of the competition is that “there’s no high-water mark” to contend with, meaning that there’s no downside to picking losers; indeed, the 2022 picks on average saw below market returns (albeit from a largely incongruent group of contestants). The annual results tend to be volatile, as you might expect given that the artificial parameters of the Contest permit contestants to disregard risk.

In the real world, there are risks associated with every pick mentioned below, but when submitting picks to the Contest, calling out the bull thesis is an inherent requirement. With that caveat, but no further preamble, we present to you this year’s picks from last year’s top three performing contestants, along with some off-the-cuff opinion and perspective “direct from the horse’s mouth” for each.1

Justin Farrell, MVP’s COO

  • XBT: I continue to believe we are in the early stages of bitcoin adoption. “Bitcoin headwinds have now become tailwinds.”
  • UBER: Uber is the largest mobility network in the world with strong growing operating metrics. Price seems to have been overly hurt by the market for fear of Tesla eating their lunch in autonomous driving. I believe it’s more likely that Tesla (and others) partner with UBER and the stock has significant upside from current levels.
  • PINS: I made this selection based on the recent work done by my colleague Jack Metzger. After reading his detailed analysis, I believe the stock is poised to go higher.
  • NVDA: This is an AI play, and despite the massive move up in the last 2 years, I believe it still has room to go higher.
  • PYPL: PYPL is one of my selections for the 3rd year in a row. I continue to believe they have a very well-run business that will continue to appreciate.
  • CVNA: After a move significantly higher in 2024 they had pull back going into year end, which presented a better entry point. I believe the future of car buying will move online and away from dealerships and Carvana will benefit from this movement as one of the early leaders in the online car space.
  • XET: I have less conviction in Ethereum vs. Bitcoin, but my overall thesis is a move much higher in Bitcoin will bring Ethereum along for the ride.
  • MSTR: I expect MSTR to continue to move higher with the rise of Bitcoin. This coupled with a 40% pullback from the highs seemed like a good entry point.
  • DIDIY US: Similar thesis to the UBER selection.
  • META: I believe they are one of the handful of companies that can afford to compete at the forefront of AI, and they are well positioned to take advantage of the potential of AI and turn it into a competitive advantage / profit. I also like Mark’s recent actions to look for alternative ways and views to advance the company.

Bill Miller IV, MVP’s CIO

  • XBT: still misunderstood and underfollowed institutionally, with additional Bitcoin Treasury strategies and further nation state adoption likely
  • EXFY: great product and accelerating traction in a massive addressable market at a compelling free cash flow multiple
  • PINS: returns on capital likely to accelerate with achievable growth levers in plain sight
  • BFH: market still underappreciating forward earnings power
  • VRMMQ: With a prepackaged bankruptcy plan, Vroom should emerge early this year with only two businesses – 1) an auto finance company at a discount to book value and 2) an auto database; also has a ~$1.5B operating loss carryforward; management options struck meaningfully higher than current price
  • CNC: dominant player in niche dual-eligibility Medicare/Medicaid market trading at a 14% forward free cash flow yield and a massive discount to broader market
  • CART: category leader as the brains and user interface in the fragmented but necessary grocery market; generates meaningful cash flow and buys back stock yet still not expensive
  • FMCC: indications suggest a likely emergence from conservatorship, implying fair value meaningfully higher than recent prices
  • AMD: AI beneficiary with solid technology trading at too big of a discount to NVDA
  • SMLR: bitcoin treasury strategy plus cash-flowing diagnostics business trading at a lower premium to NAV than MSTR; also has more shots on goal than it had before election

Bill Miller III, Founder and Former CIO of MVP

  • AMZN: dominant vertically integrated mega cap tech company with outstanding management and massive addressable markets. AWS role as “Switzerland” to AI giants is not appreciated. Kuiper competitor to Starlink begins launching this and will undercut them on price. FCF should grow strongly this year.
  • XBT: Bitcoin remains the best performing asset class since it was launched 16 years ago. Up over 100% in 2024. New, favorable regulatory environment under Trump and increasing institutional adoption in coming years should provide strong tail wind for growth. Blackrock is first major investment player to advocate a 2% bitcoin weighting in portfolios; others may soon follow
  • MSTR: “bitcoin on steroids”
  • NBIS: Netherlands based cloud data center business supporting AI companies recently new funding from NVDA and Accel Partners. Valuation too low at under 5x sales for the size of addressable market and growth rate of 50%+. No Wall Street coverage but it may be coming.
  • PGEN: new private placement will support company through the expected approval of its new gene therapy treatment whose data was compelling and had few side effects. Large pipeline as well.
  • STLA: new CEO coming, stock way down, still solid dividend, return to free cash flow this year, and inventories are clearing. John Elkann appears capable of righting the ship as he did years ago on behalf of controlling shareholders the Agnelli family. Trades at under 1.5x ev/ebitda.
  • CROX: Valuation is ridiculous for this company. Trades near the 200 week mva. If it returns to the 52 week high it would be a move of 50%
  • YOU: excellent management, pristine balance sheet with no debt and >$500 million in cash. Shares outstanding after recent buybacks are lower than just before they came public. ~85% gross margin and ~$2.60 of fcf last 12 months so fcf yield is approaching 10% on enterprise value.
  • NU: Is a holding company in Latin America for a variety of digital financial services and payments businesses, as well as traditional bank lending efforts. The stock has declined from ~$16 to ~$10 due to macro issues in Brazil which should have little impact on its business. Growth rate is 25%+, management is excellent. Early investors and current shareholders are Berkshire Hathaway, Baillie Gifford, Tencent, and Sequoia.
  • LUNR: Bulls on bitcoin think it is “going to the moon.” LUNR really is; it is a space services and technology company that last year became the first private company to land a craft on the moon. Recently won a ~$4.5 billion contract with NASA to provide lunar landers and communications technology. Management came from NASA where they were senior administrators and the company is located near NASA HQ in Houston. With Space X now valued at $350 billion, a $2.8 billion market cap seems way too low.