Last week, the Opportunity Equity Strategy's representative account gained 4.77%, outperforming the S&P 500’s 2.36% rise. (Exhibit 1). The strategy ended the week up 25.40% YTD, 851 basis points ahead of the S&P 500.
Exhibit 1: Performance of Opportunity Equity Representative Account Net of Fees, Versus S&P 500, Through 6/30/231
| Time Period | Opportunity Equity Representative Account | S&P 500 |
| Last Week (6/23 - 6/30) | 4.77% | 2.36% |
| MTD | 13.36% | 6.61% |
| QTD | 13.75% | 8.74% |
| YTD | 25.40% | 16.89% |
| 1 Year | 22.45% | 19.59% |
| 5 Year | 3.42% | 12.31% |
| 10 Year | 9.06% | 12.86% |
| Inception (annualized since 6/26/00) | 6.67% | 7.00% |
Source: Bloomberg, Patient Capital Management.
Delta Air Lines, Inc. (DAL) rose after the company outlined long-term guidance at its investor day. The company re-affirmed its 2023 guidance, now expecting to reach the top-end of its 10-12% operating margin range, the top end of its $5-$6 EPS range, at least $2B in FCF (6.6% yield), and ROIC in the low double digits. Delta continues to expect a 13-15% operating margin in 2024, at least $7 in EPS, at least $4B in FCF (13.1% yield) and ROIC in the mid-teens. Delta also announced a target of reaching at least $10B in remuneration from its American Express charge card partnership by its current contract expiration in 2028, up from at least $6.5B in 2023. Deutsche Bank raised its price target to $58 from $47 (22% upside), while Wolfe Research raised its price target to $51 from $43 (7% upside).
Norwegian Cruise Line Holdings Ltd. (NCLH) continued to rise after rival Carnival Cruise Lines reported strong F2Q results.
Coinbase Global, Inc. (COIN) continued to rise in the wake of Fidelity and Blackrock’s recent filings for Bitcoin ETF prospectuses. On Friday, the Wall Street Journal reported that according to people familiar with the matter, the United States Securities Exchange Commission (SEC) believes these filings are inadequate.
S4 Capital PLC (SFOR LN) hosted a virtual AI seminar on June 28th. Chief Growth Officer Scott Spirit, and Weslet ter Haar, Co-CEO of the Media.Monks Content Practice spoke to the importance of AI within the industry, reiterating this has been a focus for S4 since 2017 and that AI already augments the company’s workflows.
Mattel Inc. (MAT) rose above the 200-day moving average on limited news.
Exhibit 2: Significant2 Contributors to Opportunity Equity Representative Account Performance, 6/23/23 - 6/30/23
| Name | Type | Net Return |
| Delta Air Lines, Inc. | Equity | 10.9% |
| Norwegian Cruise Line Holdings Ltd. | Equity | 12.0% |
| Coinbase Global, Inc. | Equity | 16.6% |
| S4 Capital PLC | Equity | 17.6% |
| Mattel, Inc. | Equity | 8.1% |
Source: Patient Capital Management. See below for additional information.
Karuna Therapeutics, Inc. (KRTX) fell through the 50-day moving average. Oppenheimer highlighted that in meetings with key opinion leader (KOL) Dr. Craig Chepke, he sees KarXT as “clearly differentiated” in the competitive environment. KRTX remains focused on NDA filing completion by end of Sept. 2023 supported by the EMERGENT dataset. The company continues to anticipate Phase 3 ARISE adjunctive data in 2024.
Alphabet Inc. (GOOGL) fell slightly after Bernstein downgraded the name to market perform from outperform, with a $125 price target (4% upside). UBS raised its price target to $132 from $123 (10% upside).
PureTech Health PLC (PRTC LN) fell through the 50 and 100-day moving averages. The company announced it had begun a Phase 2a proof-of-concept trial for its wholly-owned therapeutic candidate LYT-300 (oral allopregnanolone) to treat patients with anxiety disorders and postpartum depression.
Alibaba Group Holding Limited. (BABA) continued to fall despite recent partnership with the world’s largest cosmetics company, L’Oreal. Bernstein downgraded the name to Market Peform from Outperform with a price target of $98, down from $130 (17% upside).
Meta Platforms, Inc. (META) CEO Mark Zuckerberg announced via Instagram channel that the company was launching a new subscription gaming service on its virtual reality headset for $7.99 per month. UBS raised its price target to $335 (17% upside) from $300, citing generative AI as the next leg to the bull case. Citi raised its price target to $360 from $315 (25% upside).
Exhibit 3: Significant2 Detractors from Opportunity Equity Representative Account Performance, 6/23/23 - 6/30/23
| Name | Type | Net Return |
| Karuna Therapeutics, Inc. | Equity | -4.6% |
| Alphabet Inc. | Equity | -2.1% |
| PureTech Health PLC | Equity | -2.1% |
| Alibaba Group Holding Limited | Equity | -1.8% |
| Meta Platforms, Inc. | Equity | -0.5% |
Source: Patient Capital Management. See below for additional information.
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.
Patient Capital Management, LLC completed its acquisition of the Opportunity Equity Strategy from Miller Value Partners, LLC on May 26, 2023. Patient Capital Management served as the investment adviser to the Opportunity Equity Strategy for the majority of the week referenced herein. Additionally, prior versions of this weekly blog posting refer to Miller Value Partners as investment adviser to the Opportunity Equity Strategy.
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 Patient Capital Management 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 Patient Capital Management.
©2023 Patient Capital Management, LLC
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