Last week, the Opportunity Equity Strategy's representative account fell -1.56%, underperforming the S&P 500’s -0.17% decline. (Exhibit 1). The strategy ended the week down -36.37% YTD, 1,835 basis points behind the S&P 500.
Exhibit 1: Performance of Opportunity Equity Representative Account Net of Fees, Versus S&P 500, Through 12/23/221
| Time Period | Opportunity Equity Representative Account | S&P 500 |
| Last Week (12/16 - 12/23) | -1.56% | -0.17% |
| MTD | -12.71% | -5.66% |
| QTD | 1.35% | 7.68% |
| YTD | -36.37% | -18.02% |
| 1 Year | -36.65% | -17.30% |
| 5 Year | 0.54% | 9.38% |
| 10 Year | 9.65% | 12.55% |
| Inception (annualized since 6/26/00) | 5.73% | 6.43% |
Source: Bloomberg, Miller Value Partners. Visit the Strategy page for Opportunity Equity performance through the most current month end period.
Cleveland-Cliffs Inc. (CLF) rose above the 100-day moving average after the company announced expectations for higher fixed price contracts for long-term auto contracts in 2023 ($1,400/ton vs 1,300/ton in 2022) and is also expecting significantly lower input and maintenance expenses next year. B Riley raised its price target to $27 from $26 (60% upside).
Teva Pharmaceutical Industries Limited (TEVA) rose above the 100-day moving average. Washington State Attorney General Bob Ferguson announced he had reached a settlement with Teva and other firms over their alleged contributions in the opioid epidemic. Later in the week, Alvotech announced the US Food and Drug Administration (FDA) had completed a review of its application for a biosimilar version of AbbVie’s HUMIRA, for which Teva is its exclusive strategic partner for commercialization in the US.
Ovintiv Inc. (OVV) and Energy Transfer LP (ET) followed oil prices higher over the course of the week. Ovintiv crossed above the 100 and 200-day moving averages, while JP Morgan highlighted the name as a top sector pick for 2023. Energy Transfer rose above the 100-day moving average. Disclosures revealed that during the previous week. Director Richard D. Brannon purchased 80,000 units for $11.55, for a total consideration of $924,000.
Fiserv, Inc. (FISV) rose above the 50 and 200-day moving averages. The company announced it had entered into a new employment agreement with Frank Bisignano, who will now remain the firm’s Chairman and CEO through at least December 2027.
Exhibit 2: Significant2 Contributors to Opportunity Equity Representative Account Performance, 12/16/22 - 12/23/22
| Name | Type | Return |
| Cleveland-Cliffs Inc. | Equity | 11.7% |
| Teva Pharmaceutical Industries Limited | Equity | 6.2% |
| Ovintiv Inc | Equity | 3.6% |
| Energy Transfer LP | Equity | 2.5% |
| Fiserv, Inc. | Equity | 1.9% |
Source: Miller Value Partners. See below for additional information.
Norwegian Cruise Line Holdings Ltd. (NCLH) fell after competitor Carnival Corporation reported Q4 FY 22 earnings that fell short of consensus expectations. During the previous week, the company amended its operating credit facility, extending its $780M Term Loan A to 2025.
Green Thumb Industries Inc. (GTBIF) continued to fall after the SAFE Banking Act, legislation that would allow legal cannabis businesses to work within the US financial system, was left out of the year-end spending bill passed in the US Senate.
General Motors Company (GM), through its Cruise subsidiary, announced it had launched its robotaxi service in Phoenix and Austin. The Senate Finance Committee Chair, Senator Ron Wyden, announced the panel was launching an investigation into possible forced labor practices in the supply chains of GM and seven other major automotive manufacturers. The company also announced it would recall 140,000 of its Chevrolet Bolt model electric vehicles due to a seatbelt-related fire hazard, and 2,100 Chevrolet Malibu vehicles due to an improperly welded front impact bar.
Silvergate Capital Corporation (SI) continued to fall in sympathy with the broader cryptocurrency market. CEO Alan Lane, when questioned by US Senators confirmed that there was no connection between his son-in-law’s title change to Deputy Chief Risk Officer, from Chief Risk Officer, and the recent volatility in the cryptocurrency space.
Stitch Fix, Inc. (SFIX) fell after JP Morgan downgraded the name to underweight from neutral. The company announced it had added Kofi Amoo-Gottfried, Chief Marketing Officer of DoorDash, to its board of directors.
Exhibit 3: Significant2 Detractors from Opportunity Equity Representative Account Performance, 12/16/22 - 12/23/22
| Name | Type | Return |
| Norwegian Cruise Line Holdings Ltd. | Equity | -9.2% |
| Green Thumb Industries Inc. | Equity | -14.8% |
| General Motors Company | Equity | -6.4% |
| Silvergate Capital Corporation | Equity | -11.4% |
| Stitch Fix, Inc. | Equity | -15.2% |
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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