Legg Mason's Miller: Microsoft Stock 'Too Cheap To Ignore'

Shares of Microsoft are "just too cheap to ignore now," Legg Mason Capital Management Chairman Bill Miller told CNBC Wednesday.

He wasn't a fan of the company in the past, he said, but "right now Microsoft is at under 10 times this year’s earnings and under nine times next year’s earnings, with a 44% return on equity generating $2 billion of free cash flow every month—and they raised the dividend 20%."

Microsoft and other "old technology" companies are on Miller's radar, as are health-care firms including Abbott Labs, Celgene and Pfizer. He's moderately underweighted in energy companies, calling the sector "more of an insurance policy than anything else."

Integrated oil companies including Chevron or Conoco "are still cheap on a multiple basis, they have good dividend yields, they’ll raise their dividend," Miller said. "They’re not an exciting part of the market but they’re a solid part of the overall market."

In technology, he said General Electric* is "one of our largest positions. GE stock today is lower than it was in October of 2008 at the height of the (financial) crisis."

As for financials, he said it is "amazing" that the assets of JP Morgan, Wells Fargo, Citigroup, Bank of America, Morgan Stanley and Goldman Sachs together are over 60% of GDP.

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"So if you’re bullish on GDP, you have to believe those six financials are going to do ok," he said, "and you can buy them in the aggregate at roughly book value, which is remarkable."

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Disclosures:

Disclosure information was not immediately available for Miller or his company.

*General Electric is a minority owner of NBCUniversal, CNBC's parent company.

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