Bill Nyrgen shared his market views and top stock ideas in an interview on CNBC's "Halftime Report" Tuesday.
The value investor explained he is bullish on Netflix shares even at a seemingly high price-to-earnings valuation multiple because the company has built a strong competitive position.
"We think there is a lot of latent pricing increase availability here," he said. "The moat that Netflix has created is already large and grows as every day goes past."
Competitors such as HBO Now charge $15 per month, which is much more expensive than Netflix's pricing even though the company spends more on content.
Netflix announced on Oct. 5 that it is raising prices for some of its subscription plans. The company's $10-per-month high-definition plan now costs $11 per month. The streaming giant reported better than expected third-quarter subscriber gains on Monday.
Nygren joined Harris Associates, the investment adviser for Oakmark Funds, in 1983. He manages the firm's flagship Oakmark Fund, which has $17.8 billion in assets as of June 2017. His fund has outperformed the S&P 500 over the past 10 years and since inception.
He also told CNBC he believes General Electric is due for a turnaround., and said his fund was adding to its position in the shares when they were trading down this year.
General Electric "within a couple years should be able to earn in the mid $1s [earnings per share] and sell at a premium to the market multiple," he said. "We're owning this because we think they can improve earnings not because of the dividend."
Nygren admitted any company with a high dividend like General Electric's 4 percent yield has "risk to the dividend or it wouldn't be priced like that."
General Electric shares are down 27 percent year to date through midday Tuesday versus the S&P 500's 14 percent return.
On the general market's valuation, Nygren is not too concerned. He said the S&P 500 is only trading at 15 percent above long term valuation averages compared to the 90 percent premium for 10-year bonds.
"I don't see the excitement typical at market peaks," he said. "We're still finding stocks to buy."