Last week, the Opportunity Equity strategy gained 2.93%, outperforming the S&P 500’s 1.98% gain. (Exhibit 1). The strategy ended the week down -31.35% YTD, 1,383 basis points behind the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 7/08/221
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (7/1 - 7/8) | 2.93% | 1.98% |
| MTD | 4.61% | 3.05% |
| QTD | 4.61% | 3.05% |
| YTD | -31.35% | -17.52% |
| Inception (annualized since 6/26/00) | 6.22% | 6.60% |
Source: Bloomberg, Miller Value Partners
Alphabet Inc (GOOGL) crossed above the 50-day moving average. Barclays cut its price target on the company from $3,200 to $3,000 (26% upside) while maintaining its overweight rating while Guggenheim lowed their price target to $2,700 from $3,000 (13% upside). Amazon.com Inc (AMZN) rose above the 50-day moving average. The company announced a new commercial agreement with Grubhub in which Amazon Prime members can sign up for a free one-year membership to Grubhub+ at no additional cost to their subscription. The deal gives Amazon warrants valued at over 3% of Grubhub, which could grow to 15% subject to the satisfaction of certain performance conditions. Benchmark raised its price target on Alibaba Group Holding Ltd. ADS (BABA) from $200 to $205 (85% upside), while Macquarie raised its price target from $145 to $148 (22% upside). Canaccord Genuity initiated coverage on Splunk (SPLK) with a buy rating and a price target of $130 (30% Upside). Green Thumb Industries Inc. (GTBIF) rose after Cantor analyst cites growing State legalization as a positive on the medium to long-term potential sales trends.
Exhibit 2: Significant Contributors to Performance, 7/1/22 - 7/8/22
| Name | Type | Return |
| Alphabet Inc | Equity | 9.8% |
| Green Thumb Industries Inc. | Equity | 16.3% |
| Amazon.com Inc | Equity | 5.5% |
| Alibaba Group Holding Ltd. ADS | Equity | 4.2% |
| Splunk Inc | Equity | 8.4% |
Source: Miller Value Partners
Teva Pharmaceutical (TEVA) appointed Eric Hughes, MD, PhD as Executive Vice President, Global R&D and Chief Medical Officer joining from Vertex Pharmaceuticals and previously Novartis. Diamondback Energy Inc (FANG) and Ovintiv Inc (OVV) both followed energy prices lower during the week. Ovintiv announced the sale of $250M in non-core acreage in the Bakken and Uinta Basins, allowing the company to pull forward the doubling of its cash returns to shareholders one quarter ahead of expectations. The company will increase its capital return to equity holders to 50% of the previous quarters FCF after paying the base dividend (up from 25% currently). Barclays maintained its overweight rating but cut its price target on Vontier Corp (VNT) from $39 to $33 (48% upside), while JP Morgan maintained its neutral rating while cutting its price target from $33 to $23 (3% upside).
Exhibit 3: Significant Detractors from Performance, 7/1/22 - 7/8/22
| Name | Type | Return |
| Teva Pharmaceutical-SP ADR | Equity | -5.7% |
| Diamondback Energy Inc | Equity | -4.0% |
| Vontier Corp | Equity | -3.0% |
| *New Security* | Equity | -1.6% |
| Ovintiv Inc | Equity | -1.0% |
Source: Miller Value Partners
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1 The performance figures reflect the deduction of a model investment management fee of 1% (the highest fee for separate accounts under our fee schedule) and certain other expenses. For important information about Opportunity Equity Strategy performance, please click on the Opportunity Equity Strategy Composite Performance Disclosure. The performance returns shown in this report are preliminary and are subject to revision. Past performance is no guarantee of future results.
Significant Contributors and Significant Detractors are based on the representative account holdings that had the greatest effect on Strategy performance for the week. Holdings that have been in the Strategy since the end of the most recent calendar quarter are identified by name. For information on how Contributor/Detractor data were calculated and a list showing the contribution to the Strategy's weekly performance of each investment held at such quarter end, contact us.
Any views expressed are subject to change at any time, and Miller Value Partners disclaims any responsibility to update such views. The information presented should not be considered a recommendation to purchase or sell any security and should not be relied upon as investment advice. It should not be assumed that any purchase or sale decisions will be profitable or will equal the performance of any security mentioned. Past performance is no guarantee of future results, and there is no guarantee dividends will be paid or continued. Content may not be reprinted, republished or used in any manner without written consent from Miller Value Partners. Portfolio composition is shown as of a point in time and is subject to change without notice.
©2022 Miller Value Partners, LLC
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