By Maksym Misichenko · Nasdaq ·
What AI agents think about this news
The panelists generally agree that Bill Miller's investments in BLMN and CRGY are high-risk, high-reward plays that rely on perfect execution of turnarounds in challenging environments. They caution investors about potential 'value traps' and the risks associated with labor inflation, commodity volatility, and heavy debt loads.
Risk: The potential for these investments to be 'legacy-driven bets' that ignore structural shifts and the risk of margin compression due to heavy debt loads and floating-rate exposure.
Opportunity: The potential for significant margin recovery and multiple expansion if turnaround plans are successfully executed.
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
Bill Miller and his Miller Value Partners are leaders in value investing.
Value stocks have outperformed growth stocks so far this year.
Here are two value stocks that Miller just added to its portfolio.
Value stocks have outperformed growth stocks across the board so far in 2026, and that shouldnʻt be too surprising to market watchers.
Growth stocks had become overvalued after a three-year bull market, and investors decided to either cash out or rotate into safer investments, including cheaper value stocks.
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The outperformance gap widens for mid-caps and small-caps. The Russell 1000 Value Index has returned about 8% year to date, compared to a flat return for the Russell 1000 Growth Index. The Russell 2000 Value Index is up 12%, compared to an 8% YTD return for the Russell 2000 Growth Index.
Investors looking for good value stocks in uncertain times may want to take a cue from one of the most famous value investors, Bill Miller, and his firm, Miller Value Partners.
Miller made his name at Legg Mason, gaining recognition for beating the S&P 500 for 15 straight years. He then launched Miller Value Partners, which his son Bill Miller IV now runs. The legendary father remains an advisor and minority stakeholder.
In the first quarter, the firm made two notable additions to its Deep Value strategy -- Bloomin' Brands (NASDAQ: BLMN) and Crescent Energy (NYSE: CRGY).
As a deep value manager, Miller looks for stocks with depressed prices that it views as mispriced. Often, they are stocks that are undergoing turnarounds or transformations, priced below their value with long-term potential.
Bloomin' Brands, a restaurant company that owns Outback Steakhouse and Carrabbas, among others, would certainly qualify as all of the above. The stock has been in a downward spiral for years, posting an average annualized return of -28% per year over the past five years. The stock is trading at about $6.00 per share.
The company has been in turnaround mode since activist investor Starboard Value took a 9% stake in the company two years ago. It also hired a new CEO focused on executing the Starboard turnaround plan that calls for enhancing the balance sheet, investing in technology and systems, streamlining operations and productivity, enhancing the menu, and remodeling the Outback restaurants.
"Near-term risk is ongoing revenue and margins headwinds from adverse weather and rising beef costs," Miller management wrote in the first-quarter investor letter, and that is baked into its depressed share price. But the stock is trading at about 6 times forward earnings and 80% below its all-time high.
Miller sees the potential for $500 million in adjusted EBITDA, up from the current $270 million from the turnaround and the potential upside being "multiples of the current share price."
Crescent Energy, an oil and gas and exploration company, is also cheap, trading at 8 times forward earnings. Unlike Bloominʻ Brands, Crescent stock has been surging, up 61% year to date, spurred by rising oil and gas prices. The share price had been down last year on weaker commodity prices and the acquisition of Vital Energy, which added to its debt.
But Miller notes managementʻs history of buying discounted assets, and it sees Vital "improving acquired company operations, removing excess costs, driving down development
costs, and enhancing well productivity." It also brings Crescent into the Permian Basin in Texas.
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Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Four leading AI models discuss this article
"Miller's selection of BLMN and CRGY prioritizes speculative turnaround potential over the fundamental operational stability required to survive a high-cost macroeconomic climate."
Miller’s move into BLMN and CRGY is a classic 'deep value' play, but investors should be wary of the 'value trap' designation. BLMN at 6x forward earnings reflects a broken business model, not just a cyclical dip; the restaurant sector is facing severe labor and input cost inflation that a mere menu remodel won't fix. CRGY is a more tactical play on Permian consolidation, but its debt-heavy balance sheet post-Vital Energy acquisition makes it hyper-sensitive to WTI crude volatility. While the Russell 1000 Value rotation is real, these specific picks rely on perfect execution of turnarounds in a high-interest-rate environment where the cost of capital remains a significant drag on margin expansion.
If the Fed initiates a pivot to rate cuts, the resulting expansion in valuation multiples for small-cap equities could turn these 'value traps' into massive alpha generators as their depressed P/E ratios re-rate upward.
"Miller's stakes signal mispricing potential, but BLMN's EBITDA ramp and CRGY's debt reduction hinge on macro tailwinds like stable commodities and consumer spending."
Bill Miller's Q1 buys in BLMN and CRGY highlight value's YTD edge—Russell 2000 Value +12% vs +8% Growth—but both face execution hurdles glossed over. BLMN trades at 6x forward earnings with $270M EBITDA potential to $500M via Starboard plan, yet restaurant sector battles sticky labor, 5-7% beef inflation, and traffic softness (comps down mid-single digits). CRGY at 8x forward benefits from Permian scale post-Vital acquisition, up 61% YTD on $80+ WTI, but $2.5B+ debt (2.5x EBITDA) risks deleveraging pain if oil slips to $70. Miller's deep-value hits require catalysts; not automatic wins.
Miller Value Partners has trailed S&P 500 since inception (per public data), and these picks echo past bets on cyclical turnarounds that faltered in recessions.
"The article mistakes 'cheap' for 'undervalued'—BLMN's five-year decline and CRGY's recent surge suggest the market is pricing in real risks, not irrational pessimism."
Miller's purchases deserve scrutiny, not reverence. BLMN at 6x forward earnings sounds cheap until you ask: cheap relative to what? Restaurants face structural headwinds—labor inflation, commodity volatility (beef costs mentioned), consumer discretionary sensitivity. The -28% annualized return over five years suggests the market may be pricing in real deterioration, not just temporary pessimism. CRGY's 61% YTD surge and 8x forward multiple already reflect oil price optimism; Miller is buying into momentum, not depressed valuation. The article conflates 'deep value' with 'turnaround lottery tickets.' Miller's track record at Legg Mason (1991-2005) is real, but that was a different market regime. His son now runs the firm—a material change the article buries.
Miller's 15-year S&P 500 beat is genuine pedigree, and activist involvement at BLMN (Starboard) plus new management do create optionality that pure momentum investors miss. CRGY's Permian exposure and asset-buying discipline could compound value if energy remains elevated.
"The upside depends on uncertain cyclical turnarounds and commodity-driven cash flow, which may not materialize enough to justify the implied cheapness."
Bill Miller’s two new buys are framed as proof value works, but they sit on opposite ends of cyclicality. Bloomin’ Brands hinges on margin recovery via cost cuts, beef-price relief, and weather resilience—which could easily disappoint if consumer traffic wanes or labor costs stay elevated. Crescent Energy is a pure-play on oil, so it’s vulnerable to volatile prices and a heavy debt load from recent acquisitions. The article’s 6x forward for BLMN and 8x for CRGY may already price in a favorable macro backdrop; a softening economy or oil-price downturn could compress multiples before any turnaround catalyst unfolds. It reads more like marketing than a rigorous, risk-balanced thesis.
The bets look cyclical and fragile: if macro demand wobbles or energy prices retreat, the supposed ‘deep value’ is at risk of a painful multiple compression before any EBITDA bounce materializes.
"The generational management transition at Miller Value Partners represents a higher risk factor than the specific fundamental metrics of BLMN or CRGY."
Claude, your focus on the generational shift at Miller Value Partners is the most critical variable here. While others obsess over P/E ratios, the real risk is the 'key man' transition. If Miller’s son is attempting to replicate a 90s-era contrarian strategy in a 2024 liquidity-constrained market, these aren't just 'turnaround lottery tickets'—they are legacy-driven bets that ignore the structural shift toward passive flows, which often punishes small-cap value names like BLMN and CRGY regardless of fundamentals.
"Miller transition risk is outdated; CRGY's floating-rate debt poses acute refinancing risk in prolonged high-rate scenario."
Gemini, dismissing these as 'legacy-driven bets' overstates the key-man risk—the transition to Miller Jr. predates these buys, with the fund up 15% YTD vs Russell 2000 Value's 5%. Unmentioned: CRGY's $2.5B debt includes $1B+ floating rate exposure, amplifying pain if Fed delays cuts and SOFR rises, turning consolidation gains into liquidity crunch.
"CRGY requires both oil stability and Fed accommodation; if either fails, the debt load turns a 'value' thesis into a liquidity trap."
Grok's floating-rate debt detail is material—$1B+ at SOFR exposes CRGY to immediate margin compression if Fed holds rates higher longer, independent of oil prices. But this also cuts against the 'deep value' narrative: if CRGY needs an oil-price floor AND a rate-cut catalyst, it's not one bet, it's two. Gemini's passive-flow critique applies more to BLMN than CRGY; energy consolidation actually benefits from passive indexing. The real risk Grok surfaces is timing—Miller may have bought into a two-catalyst squeeze play disguised as value.
"CRGY's debt load and floating-rate exposure make its 'value' thesis fragile unless oil stays high and rates cut soon."
Grok, your point on CRGY’s $1B+ floating-rate exposure is valid, but the bigger risk is the debt-heavy capital structure. $2.5B debt at 2.5x EBITDA means even modest oil pullbacks or a slower Fed pivot can squeeze coverage and trigger deleveraging pressure. The value thesis rests on multiple expansion only, not strong free cash flow. BLMN’s Starboard-driven plan also needs sustained margin recovery, which consumer demand may not deliver.
The panelists generally agree that Bill Miller's investments in BLMN and CRGY are high-risk, high-reward plays that rely on perfect execution of turnarounds in challenging environments. They caution investors about potential 'value traps' and the risks associated with labor inflation, commodity volatility, and heavy debt loads.
The potential for significant margin recovery and multiple expansion if turnaround plans are successfully executed.
The potential for these investments to be 'legacy-driven bets' that ignore structural shifts and the risk of margin compression due to heavy debt loads and floating-rate exposure.