Last week, the Opportunity Equity Strategy's representative account declined -2.72%, underperforming the S&P 500’s -0.06% fall. (Exhibit 1). The strategy ended the week up 7.24% YTD, 19 basis points behind the S&P 500.
Exhibit 1: Performance of Opportunity Equity Representative Account Net of Fees, Versus S&P 500, Through 4/7/231
| Time Period | Opportunity Equity Representative Account | S&P 500 |
| Last Week (3/31 - 4/7) | -2.72% | -0.06% |
| MTD | -2.72% | -0.06% |
| QTD | -2.72% | -0.06% |
| YTD | 7.24% | 7.43% |
| 1 Year | -24.13% | -6.79% |
| 5 Year | 3.00% | 11.48% |
| 10 Year | 8.65% | 12.35% |
| Inception (annualized since 6/26/00) | 6.01% | 6.68% |
Source: Bloomberg, Miller Value Partners. Visit the Strategy page for Opportunity Equity performance through the most current month end period.
Ovintiv Inc. (OVV) rose after announcing it would acquire three EnCap-backed private equity portfolio companies in the Permian basin for $3.125B and 32.6M shares. Management pre-announced Q1 results with total production coming in at 510 MBOE/d, above the prior guide of 500 MBOE/d. Oil and condensate production of 165 Mbbls/d was above the previous guide of 160 Mbbls/d. CapEx guidance was narrowed to $615M at the midpoint, previously $625M. On its FY 2023 outlook management expects total production of 533M MBOE/d at the midpoint, raised from 513 MBOE/d previously. Oil and condensate production of 190 Mbbls/d was raised from 170 Mbbls/d while CapEx was increased to $2.75B at the midpoint from $2.25B in the prior outlook. Management maintained their commitment to return 50% of post-base dividend FCF to shareholders with the balance being used for debt paydown and further bolt-on acquisitions. TD Cowen lowered its price target to $53 from $79 (35% upside), while Truist raised its price target to $56 from $54 (43% upside).
In an interview with the Wall Street Journal, Alphabet Inc. (GOOGL) CEO Sundar Pichai signaled additional cost savings initiatives for the company by emphasizing there was “work left to do” in the company’s efficiency drive. Pichai also mentioned that Google Search is set to feature Chat AI using Alphabet’s Bard technology. UBS raised its price target to $123 from $120 (13% upside).
Teva Pharmaceutical Industries Limited (TEVA) rose above the 200-day moving average.
Meta Platforms, Inc. (META) announced it had renewed 17 members of its independent content oversight board, naming board Member Evelyn Aswad Co-Chair along with existing Co-Chairs Catalina Botero-Marino, Michael McConnell, and Helle Thorning-Schmidt. UBS raised its price target to $280 from $235 (29% upside), while Jefferies raised its price target to $250 from $225 (15% upside).
Alibaba Group Holding Limited (BABA) rose as the company announced it began testing its own ChatGPT-like AI messenger service, inviting users and business to sample the product.
Exhibit 2: Significant2 Contributors to Opportunity Equity Representative Account Performance, 3/31/23 - 4/7/23
| Name | Type | Net Return |
| Ovintiv Inc. | Equity | 8.2% |
| Alphabet Inc. | Equity | 4.5% |
| Teva Pharmaceuticals Industries Ltd. | Equity | 4.7% |
| Meta Platforms, Inc. | Equity | 2.0% |
| Alibaba Group Holding Limited | Equity | 0.5% |
Source: Miller Value Partners. See below for additional information.
The Wall Street Journal reported that Expedia Group, Inc. (EXPE) is rolling out its own new ChatGPT feature in its mobile app, creating a search feature to assist with travel planning.
Coinbase Global, Inc. (COIN) fell through the 50-day moving average. Bank of America raised its price target to $45 from $38 (-28% downside).
Mattel, Inc. (MAT) fell below the 50 and 100-day moving averages. DA Davidson maintained its $23 price target (30% upside).
Taylor Morrison Home Corporation (TMHC) and Farfetch Limited (FTCH) fell on limited news.
Exhibit 3: Significant2 Detractors from Opportunity Equity Representative Account Performance, 3/31/23 - 4/7/23
| Name | Type | Net Return |
| Expedia Group, Inc. | Equity | -5.5% |
| Coinbase Global, Inc. | Equity | -9.1% |
| Taylor Morrison Home Corp | Equity | -5.1% |
| Mattel, Inc. | Equity | -4.8% |
| Farfetch Limited | Equity | -9.2% |
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. The net return shown above for each individual security represents the change in market price of the security during the week, according to a third-party pricing service, or for the partial period held in the portfolio during the week. Net returns also include any purchases or sales that were made 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.
©2023 Miller Value Partners, LLC
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