Last week, the Opportunity Equity Strategy's representative account rose 2.92%, outperforming the S&P 500’s 1.56% rise. (Exhibit 1). The strategy ended the week down -28.61% YTD, 1,432 basis points behind the S&P 500.
Exhibit 1: Performance of Opportunity Equity Representative Account Net of Fees, Versus S&P 500, Through 11/25/221
| Time Period | Opportunity Equity Representative Account | S&P 500 |
| Last Week (11/18 - 11/25) | 2.29% | 1.56% |
| MTD | 2.92% | 4.15% |
| QTD | 13.71% | 12.59% |
| YTD | -28.61% | -14.29% |
| 1 Year | -34.79% | -12.99% |
| 5 Year | 3.92% | 11.07% |
| 10 Year | 11.89% | 13.24% |
| Inception (annualized since 6/26/00) | 6.29% | 6.67% |
Source: Bloomberg, Miller Value Partners. Visit the Strategy page for Opportunity Equity performance through the most current month end period.
Silvergate Capital Corporation (SI) rose after CEO Alan Lane wrote a letter to shareholders on Monday that highlighted the bank’s ample capital well above minimum regulatory levels and their robust compliance and risk management program required by the US Bank Secrecy Act. Later in the week, private blockchain software company Block.one founder Brendan Blumer disclosed a 1.8% stake in Silvergate, along with Block.one itself acquiring a 7.5% stake for a combined 9.3% position. JP Morgan lowered its price target to $50 from $80 (72% upside), while BTIG lowered its price target to $51 from $135 (75% upside).
PureTech Health PLC (PRTC LN) rose as filings continue to reveal that PureTech has been actively exercising its share repurchase program announced in May 2022 (~10% of shares outstanding).
JP Morgan turned bullish on the housing sector and raised its price target on Taylor Morrison Home Corporation (TMHC) to $39.50 from $29.50 (35% upside) as economic data showed fundamental improvement in October. New home sales rose 7.5% sequentially to 632k, more than the -5.5% decline expected. New home inventory rose 1.5% sequentially and 21.4% YoY, while median prices rose 8.2% sequentially and were up 15.4% YoY. The Houston Business Journal reported that the company did not renew its three-year licensing agreement with Christopher Todd Communities to develop build-to-rent communities nationwide.
Mattel, Inc. (MAT) rose as Bank of America anticipated strong “Black Friday” foot traffic driven by promotions at major retailers such as Walmart, which made up 35% of Mattel’s sales in FY 2021 per Stifel.
OneMain Holdings, Inc. (OMF) rose on limited news.
Exhibit 2: Significant2 Contributors to Opportunity Equity Representative Account Performance, 11/18/22 - 11/25/22
| Name | Type | Return |
| Silvergate Capital Corporation | Equity | 16.3% |
| PureTech Health PLC | Equity | 15.1% |
| Taylor Morrison Home Corporation | Equity | 6.3% |
| Mattel, Inc. | Equity | 5.8% |
| OneMain Holdings, Inc. | Equity | 4.8% |
Source: Miller Value Partners. See below for additional information.
SoFi Technologies, Inc. (SOFI) fell after the Biden administration announced it would enact a final postponement of the student loan payment moratorium until August 2023, which had previously been expected to expire in January. Earlier in the week, members of the US Senate Banking Committee called on regulators to review the bank’s digital asset trading activities and confirm that they adhere to US Banking Laws while expressing these concerns in a separate letter to CEO Anthony Noto. Wedbush lowered its price targets to $6 from $8 (30% upside), while Mizuho lowered its price target to $6 from $7 (30% upside).
JP Morgan lowered its price target on Farfetch Limited (FTCH) to $15 from $16 (89% upside), while Société Générale lowered its price target to $11 from $12 (39% upside).
Alibaba Group Holding Ltd. (BABA) fell over the week in sympathy with the broader Chinese Internet sector on fears of rising Covid-19 cases in the country. Reuters reported that the People’s Bank of China (PBOC) plans to fine Alibaba affiliate Ant Group more than $1B as soon as 2Q 2023 for “disorderly expansion of capital.” The fine was regarded as a positive development potentially paving the way for the company to secure a financial holding company license and eventually revive plans for its previously shelved public market debut. Mizuho cut its price target to $155 from $160 (105% upside).
Loop Capital lowered its price target on Uber Technologies Inc (UBER) to $40 from $42 (40% upside) after trimming its 2024 EBITDA estimate to be more in line with management guidance given the more difficult macroeconomic environment.
S4 Capital PLC (SFOR) fell on limited news.
Exhibit 3: Significant2 Detractors from Opportunity Equity Representative Account Performance, 11/18/22 - 11/25/22
| Name | Type | Return |
| SoFi Technologies, Inc. | Equity | -11.2% |
| Alibaba Group Holding Ltd. | Equity | -6.2% |
| Farfetch Limited | Equity | -2.3% |
| Uber Technologies Inc | Equity | -1.6% |
| S4 Capital PLC | Equity | -2.1% |
Source: Miller Value Partners. See below for additional information.
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As of prior week's market close unless otherwise stated.
1The performance figures for the representative Opportunity Equity account reflect the deduction investment management fees and certain other expenses. Returns greater than 1 year are annualized.
For additional information about Opportunity Equity Strategy performance, please click on the Opportunity Equity Strategy Composite Performance Disclosure. Past performance is no guarantee of future results.
2Significant Contributors and Detractors are based on holdings that had the greatest effect on representative account performance for the week. Holdings that have been in the portfolio since the end of the most recent calendar quarter are identified by name. Returns listed above represent the market performance of the individual security during the week, or for the partial period held in the portfolio during the week. 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. There is no guarantee that market trends discussed herein will continue. 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. References to specific securities are for illustrative purposes only. Portfolio composition is shown as of a point in time and is subject to change without notice. Content may not be reprinted, republished or used in any manner without written consent from Miller Value Partners.
©2022 Miller Value Partners, LLC
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