Opportunity Equity Strategy Update for 10/13/2023 - 10/20/2023

Energy Transfer Follows Energy Higher while United Falls Despite Strong Earnings

Last week, the Opportunity Equity Strategy's representative account fell -3.40%, underperforming the S&P 500’s -2.38% decline. (Exhibit 1). The strategy ended the week up 9.91% YTD, 156 basis points behind the S&P 500.

Exhibit 1: Performance of Opportunity Equity Representative Account Net of Fees, Versus S&P 500, Through 10/20/23¹

Time Period	Opportunity Equity Representative Account	S&P 500
Last Week (10/13 - 10/20)	-3.40%	-2.38%
MTD	-7.01%	-1.42%
QTD	-7.01%	-1.42%
YTD	9.91%	11.47%
1 Year	5.75%	17.18%
5 Year	0.43%	10.72%
10 Year	5.90%	11.33%
Inception (annualized since 6/26/00)	5.98%	6.69%

Energy Transfer LP (ET) rose following oil prices higher over the course of the week. On Friday, the partnership announced an increase to its quarterly cash distribution to $0.3125 from $0.31 previously.

Citi initiated coverage on Mattel, Inc. (MAT) with a $26 price target (27% upside) citing a right-sized cost structure, deleveraging, and the potential reignition of topline growth through a combination of the return of Disney Princess, strong vehicle momentum, and added lift from the Barbie movie.

Coinbase Global, Inc. (COIN) followed bitcoin prices higher over the course of the week. As part of its international expansion plans, the company established a European Union regulatory hub in Dublin, Ireland, and named Germany as a regional talent hub.

Travel + Leisure Co. (TNL) completed a term securitization transaction worth $300M with an overall weighted average coupon of 6.78%. With this issuance, the company has completed three asset-backed securitizations totaling $850 million in principal in 2023.

S4 Capital PLC (SFOR LN) rose on limited news.


Exhibit 2: Significant² Contributors to Opportunity Equity Representative Account Performance, 10/13/23 - 10/20/23

Name	Type	Net Return
Energy Transfer LP	Equity	1.2%
Mattel, Inc.	Equity	1.2%
Coinbase Global, Inc.	Equity	1.7%
Travel + Leisure Co.	Equity	1.1%
S4 Capital PLC	Equity	1.5%

Expedia Group, Inc. (EXPE) partnered with AIR MILES, a leading Canadian loyalty program, to provide its global supply of 700,000 hotels and vacation rental properties to AIR MILES’s 10M-strong active account base. Expedia also partnered with Afterpay to allow app users in Australia to book Expedia travel and pay in four interest-free installments. Baptista Research rated Expedia a new buy with a $128.70 price target (37% upside).

United Airlines Holdings, Inc. (UAL) declined on macro concerns despite reporting strong 3Q earnings. Adjusted EPS came in at $3.65 vs. consensus estimates of $3.34, and revenues came in ahead of expectations at $14.5B vs. the $14.4B expected. The company guided for 4Q23 Revenue to be up 9.0%-10.5% Y/Y, with EPS of $1.50-$1.80, depending on the timing of the reinstatement of its flights to Tel-Aviv, Israel. For full year 2023, United lowered its CapEx guidance to $8B from $8.5B, on previously expected aircraft deliveries delayed until FY 2024. JP Morgan raised its price target to $98 from $93 (179% upside), while Bernstein lowered its price target to $57 from $68 (62% upside).

Bloomberg News reported Amazon.com, Inc. (AMZN) started testing medication delivery by drone in Texas, while The Wall Street Journal reported that Amazon is interested in an NBA package with local and national broadcasting rights. Truist lowered its price target to $174 from $176 (39% upside), while UBS cut its price target to $178 from $180 (42% upside).

Delta Air Lines Inc (DAL) declined on macro concerns despite reporting strong results during the previous week. In response to customer feedback, Delta modified the qualification requirements for various tiers of its popular SkyMiles frequent flyer program, lowering the spending requirements for lounge access and other benefits.

Oppenheimer raised its price target on Citigroup Inc. (C) to $82 from $81 (107% upside), while BMO raised its price target to $66 from $61 (66% upside).

Exhibit 3: Significant² Detractors from Opportunity Equity Representative Account Performance, 10/13/23 - 10/20/23

Name	Type	Net Return
Expedia Group, Inc.	Equity	-5.6%
United Air Lines Holdings, Inc.	Equity	-9.4%
Amazon.com, Inc.	Equity	-3.6%
Delta Air Lines, Inc.	Equity	-5.5%
Citigroup Inc.	Equity	-4.2%

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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.

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. 

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