Legendary stock picker Bill Miller said Wednesday the nation's biggest airlines and e-commerce giant Amazon are greatly misunderstood.
The knock on Amazon from critics is the company generates lots of revenue but little profit. But that's exactly why Miller likes the stock.
"As long as people say Amazon doesn't make any money I will know that it is misunderstood and probably mispriced," said the chairman and chief investment officer of Baltimore-based LMM Investments, a partially owned subsidiary of Legg Mason, with $2.9 billion of assets under management.
"When Amazon came public [in 2002] it had a $400 million market cap. It's a $250 billion market cap right now," Miller told CNBC's "Squawk Box," questioning how it made such a big jump without making money. "The answer is ... there's a difference between creating economic value and reporting GAAP accounting profits."
Miller also pointed to the online retailer's Amazon Web Services (AWS) arm, which is currently an $8 billion business, "growing 80 to 100 percent a year."
"[Overall] you have global company which has a dominate position and no competition as far as the eye can see," he contended, predicting the company could be worth as much as double the current value.
LMM holds shares of Amazon, as does the Legg Mason Opportunity Trust fund, a portfolio Miller also manages.