Expedia Rises on Earnings while Canada Goose Declines on Lowered Guidance
Last week, the Opportunity Equity Strategy's representative account gained 10.36%, outperforming the S&P 500’s 5.88% rise. (Exhibit 1). The strategy ended the week up 16.15% YTD, 110 basis points ahead of the S&P 500.
Exhibit 1: Performance of Opportunity Equity Representative Account Net of Fees, Versus S&P 500, Through 11/3/231
| Time Period | Opportunity Equity Representative Account | S&P 500 |
| Last Week (10/27 - 11/3) | 10.36% | 5.88% |
| MTD | 7.10% | 3.94% |
| QTD | -1.73% | 1.75% |
| YTD | 16.15% | 15.05% |
| 1 Year | 12.52% | 19.14% |
| 5 Year | 1.57% | 11.78% |
| 10 Year | 6.55% | 11.57% |
| Inception (annualized since 6/26/00) | 6.22% | 6.82% |
Source: Bloomberg, Patient Capital Management.
Expedia Group, Inc. (EXPE) rose above the 50, 100, and 200-day moving averages after reporting strong 3Q results. Revenue of $3.9B and EBITDA of $1.2B were in-line with consensus expectations, while adjusted EPS beat at $5.41 vs. $5.01 expected. Year to date, Expedia has repurchased 17M shares for $1.8B (11.1% of shares outstanding). Concurrent with 3Q results, Expedia announced an incremental $5B share repurchase program, enough to repurchase 32% of shares outstanding at current prices. TD Cowen raised its price target to $110 from $105 (-2% downside), while Barclays raised its price target to $136 from $128 (21% upside).
Amazon.com, Inc. (AMZN) rose above the 50 and 100-day moving averages after the company reported better than expected 3Q results during the previous week. Amazon Business announced its first buy now, pay later checkout button on its website, in partnership with Affirm. Loop Capital raised its price target to $205 from $200 (48% upside.
Cowen initiated coverage on OneMain Holdings, Inc. (OMF) with a $43 price target (12% upside), and an outperform rating.
Coinbase Global, Inc. (COIN) rose above the 50 and 100-day moving averages after reporting 3Q 2023 results. The company reported revenue of $674M above consensus of $655M with adjusted EBITDA coming in above consensus at $181M vs $120M expected and adjusted EPS of -$0.10 beating consensus of -$0.57. For 4Q, management guided for General & Administrative spend of $525M-$575M, Sales & Marketing spend of $85-$95M and anticipates generating “meaningful” positive adjusted EBITDA in FY 2023. Jefferies lowered its price target to $85 from $90 (0% upside), while JP Morgan raised its price target to $80 from $74 (-7% downside).
Citigroup Inc. (C) rose above the 50-day moving average.
Exhibit 2: Significant2 Contributors to Opportunity Equity Representative Account Performance, 10/27/23 - 11/3/23
| Name | Type | Net Return |
| Expedia Group, Inc. | Equity | 21.1% |
| Citigroup Inc. | Equity | 11.9% |
| Amazon.com, Inc. | Equity | 8.5% |
| OneMain Holdings, Inc. | Equity | 10.5% |
| Coinbase Global, Inc. | Equity |
21.2% |
Source: Patient Capital Management. See below for additional information.
Canada Goose Holdings Inc. (GOOS) fell after reporting 2Q FY 2024 earnings that exceeded expectations but lowering full year guidance. Net sales came in at C$281M vs consensus of C$279M with adjusted EPS of C$0.22 well ahead of consensus of -C$0.22. The company lowered FY24 guidance with net sales of C$1.2B from C$1.4B previously, with operating margins of 14% at the midpoint, down from 15.5% previously, and adjusted EPS of C$0.60-$C1.40, down from C$1.20-1.48 previously. UBS lowered its price target to $10 from $18 (-4% downside), while Raymond James lowered its price target to $11.70 from $19 (13% upside).
There were no further detractors during the week.
Exhibit 3: Significant2 Detractors from Opportunity Equity Representative Account Performance, 10/27/23 - 11/3/23
| Name | Type | Net Return |
| Canada Goose Holdings Inc. | Equity | -8.2% |
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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