Bill Miller said he believes there are many attractive opportunities in the stock market right now, recently naming his favorite areas for top picks. The founder of Miller Value Partners said he remains bullish on the economy and believes that the Federal Reserve's move to raise rates is likely to spur the shift to value from growth stocks. "Even after last week's move, stock prices remain down year-to-date, and I believe there are many good values in the market," Miller said in a post on his firm's website. "I also believe that a strong U.S. economy with low unemployment, plentiful jobs, rising wages, the strongest real growth in many years, and a Fed that has begun to raise rates makes it likely that a rotation to value stocks from the growth stocks that led the market for the past 10 years has begun," Miller wrote. The stock market suffered a sizeable correction in 2022 on fears of surging inflation and rising interest rates, while Russia's invasion of Ukraine further added to the uncertainty on the global economy. Still, Miller believes volatile times like this make a good environment to pick stocks and scoop up some bargains. Energy The first attractive area in the market is energy stocks, Miller said, adding they are very cheap especially with popping oil prices. Energy stock "prices do not reflect oil even in the $70s, much less over $100," Miller said. West Texas Intermediate crude futures , the U.S. oil benchmark, traded above $110 per barrel on Thursday after topping $130 to hit its highest level since 2008 in early March. Miller told CNBC earlier this month that his firm went overweight oil stocks in the spring of 2021, the first time in 35 years he's done so. Chinese stocks Miller also sees value in beaten-down Chinese stocks, saying their valuations appear "too low," particularly as the government is easing on companies. Last year, Beijing introduced a slew of regulations , in part aimed at the tech sector — a move that spooked investors and wiped out billions of dollars in market value from the country's internet giants. Recently, signs have showed that the pressure has eased a bit. Chinese and U.S. regulators are progressing toward a cooperation plan on U.S.-listed Chinese stocks. Miller Value Partners owned a sizeable stake in Chinese e-commerce giant JD.com as of the end of 2021, the firm's third largest long position, according to a regulatory filing. Financials and housing The investor said financial stocks appear attractive as they are big beneficiaries from rising rates. Bank stocks are very sensitive to interest rates as their profit margins tend to get a boost as rates climb. Meanwhile, Miller said the valuations of housing stocks are in the low- to mid-single digits and "do not reflect even a modest continuation of the current fundamentals." More picks Travel-related names such as airlines and cruise ships could see a sustained rebound as the economy continues to recover, Miller said. These names "should see years of strong demand due to robust consumer balance sheets and a solid economy," Miller said. The value investor said megacap tech leaders, such as Amazon and Meta , are also attractive. At the end of last year, Amazon was Miller's second biggest position, while he also held a big bet on Meta, according to a filing. Finally, Miller recommended that investors look at a basket of names down 50% or more from their 52-week highs for some "long-term bargains."
Scott Mlyn | CNBC
Bill Miller said he believes there are many attractive opportunities in the stock market right now, recently naming his favorite areas for top picks.