NEW YORK (CNN/Money) - Battered conglomerate Tyco International is facing a criminal probe and its debt was downgraded to junk bond status. But at least one investor -- star manager Bill Miller of Legg Mason -- thinks the stock looks hot.

Miller, manager of Legg Mason Value Trust, the only mutual fund to beat the S&P 500 11 years in a row, said Tyco has the potential to increase 250 percent in the next year.

"When Tyco was at 17, I was looking around to see what to sell to buy more of it," Miller said at a press luncheon at the toney Rainbow Room in Manhattan Tuesday. "When Tyco went to 10, there was no name we couldn't sell."

The support from such a Wall Street legend couldn't come at a better time for Tyco (TYC: Research, Estimates), whose stock is down about 80 percent since December.

Former Chief Executive Dennis Kozlowski was indicted last week and charged with cutting illegal deals to evade more than $1 million in taxes on valuable old paintings. Authorities are investigating whether the company bought homes and artwork for several executives without disclosing it. On Monday, Fitch Ratings cut Tyco's debt and commercial paper to "junk." It was the third agency to lower Tyco's debt in the past week. The same day, the company fired a top lawyer without explanation.

In addition, the SEC, which took a look at the company's finances in 1999, is once again eyeing Tyco's activities.

Miller said he has seen no signs so far of financial improprieties at Tyco, and he compared its struggles with Waste Management (WMI: Research, Estimates). Waste Management, the nation's largest trash hauler, bounced back after paying more than $600 million to settle lawsuits stemming from auditing practices and violation of securities laws. It was not immediately clear earlier Tuesday if he was aware of the latest SEC news.

Tyco was one of the top ten holdings in the $9.1 billion Legg Mason Value Trust as of March 31, according to Morningstar. The fund has 3.7 percent of its assets in the stock. And Miller is paying for it dearly: The fund is down 11.4 percent year to date as of June 10, putting it at the bottom of its category. (Click here to read more about Bill Miller's stock picks in MONEY.)

But Miller has become a Wall Street legend for his track record beating the S&P. Most funds year in and year out do not beat the index. Legg Mason Value Trust has earned an annualized 17.1 percent over 10 years.