Bill Miller sees brighter future for Valeant

Bill Miller: Valeant could double
Bill Miller: Valeant could double

Bill Miller, chairman & CIO of LMM, said he's optimistic about the future of Valeant Pharmaceuticals.

Speaking with CNBC's "Closing Bell" on Friday, he acknowledged it is "probably the most toxic name in the market," but he said the troubled pharmaceutical company should be worth about double its current trading price.

"It's worth at least $60 and we can get significantly higher prices depending on what happens in the business in the next couple of years," Miller said. The stock closed Friday at about $32 per share.

The Canada-based drug maker has been struggling after its stock dropped more than 80 percent since August as a result of high drug prices and a controversial relationship with a specialty pharmacy, which drew criticism in the political sphere.

Traders work on the floor of the New York Stock Exchange underneath a board showing the name of Valeant Pharmaceuticals shortly before the opening of the markets in New York October 22, 2015.
Lucas Jackson | Reuters

Though it has decided not to sell any major businesses as of yet, Valeant is reviewing its options with investment banks as interest from buyout firms increases.

"When you have a busted roll-up like Valeant ... if those businesses they bought are good cash generating businesses, the cash will be used to pay down the debt," Miller said.

Whether or not Valeant will ever trade at $200 per share again is doubtful, Miller said, adding there would have to be changes to its business model for Valeant to bounce back to its former highs.

"I think there was aggressive behavior driven by the incentive structure to get the stock higher," Miller said of Valeant.

And Valeant isn't the only company Miller said he expects to show promise, predicting that Amazon will double in the next three years. He cited that company's growing cloud business as one that shows promise.

Miller also told CNBC that he thought financials had hit their low point, seeing Bank of America trading higher yesterday to be "a very good sign."

"The financials are cheap relative to the market and cheap relative to their own history on a price-to-book basis," Miller said. "It looks like the financials have bottomed out to us."