Coinbase Follows Bitcoin Prices Higher while Expedia Falls on Surprise CEO Transition
Last week, the Opportunity Equity Strategy's representative account account declined -0.80%, underperforming the S&P 500’s 1.40% rise. (Exhibit 1). The strategy ended the week flat at 0.00% YTD, 552 basis points behind the S&P 500.Exhibit 1: Performance of Opportunity Equity Representative Account Net of Fees, Versus S&P 500, Through 2/9/241
| Time Period | Opportunity Equity Representative Account | S&P 500 |
| Last Week (2/2 - 2/9) | -0.80% | 1.40% |
| MTD | 1.05% | 3.77% |
| QTD | 0.00% | 5.52% |
| YTD | 0.00% | 5.52% |
| 1 Year | 16.18% | 25.18% |
| 5 Year | 6.91% | 15.10% |
| 10 Year | 7.41% | 12.93% |
| Inception (annualized since 6/26/00) | 6.98% | 7.41% |
Source: Bloomberg, Patient Capital Management.
In an interview with CNBC, Alphabet Inc. (GOOGL) CEO Sundar Pichai announced that Google’s AI chatbot would be renamed Gemini from Bard, with premium pricing starting at $19.99 per month.
Crocs, Inc. (CROX) rose through the 50 and 200-day moving averages. UBS raised its price target to $100 from $98 (-7% downside).
Coinbase, Inc. (COIN) followed Bitcoin prices higher over the course of the week.
IAC, Inc. (IAC) rose on limited news.
Exhibit 2: Significant2 Contributors to Opportunity Equity Representative Account Performance, 2/2/24 - 2/9/24
| Name | Type | Net Return |
| Alphabet Inc. | Equity | 4.6% |
| Crocs, Inc. | Equity | 9.5% |
| *New Security* | Equity | 9.0% |
| Coinbase Global, Inc. | Equity | 9.9% |
| IAC Inc. | Equity |
3.2% |
Source: Patient Capital Management. See below for additional information.
Expedia Group, Inc. (EXPE) fell through the 50-day moving average after CEO Peter Kern unexpectedly stepped down as CEO concurrent with the company’s 4Q results. Mr. Kern will retain his seat on the Board of Directors and Vice Chairman title. Effective May 14th, 2024, Mr. Kern will be succeeded as CEO by current President of Expedia for Business Ariane Gorin. Revenue of $2.9B and EBITDA of $532M were in-line with consensus expectations, while adjusted EPS beat at $1.72 vs. $1.69 expected. Expedia repurchased 19M shares in FY 2023 for $2B (12% of shares outstanding). Bank of America downgraded the name to neutral from buy, lowering its price target to $156 from $181 (19% upside), while DA Davidson raised its price target to $152 from $125 (16% upside).
One Main Holdings, Inc. (OMF) fell after the company reported disappointing 4Q earnings driven by higher than expected net charge-offs (NCOs). Revenue was roughly in-line at $1.10B vs. $1.09B expected, while EPS beat at $1.39 at $1.37 expected. Capital allocation remains shareholder friendly as the company maintained the quarterly dividend of $1.00 per share (8.9% annualized yield), and repurchased 531k shares for $20M. FY 2024 guidance calls for managed receivables growth of 3-5%, net charge-offs of 7.7%-8.3%, along with an operating expense ratio that is expected to improve from 7% to 6.7%. Deutsche Bank raised its price target from $62 to $68 (38% upside), while JMP raised its price target to $57 from $53 (18% upside).
UBS Group AG (UBS) fell through the 50-day moving average after earnings missed consensus estimates. Revenue came in at $10.9B vs. $11.3B expected, while EPS came in at -$0.09 vs. -$0.07 for the street. The company missed on both net interest income (NII) coming in at $2.1B vs $2.4B expected and net fee & commission income. The bank raised its annual dividend to $0.70 per share (2.5% yield), and authorized a new share repurchase of up to $1B (1.1% of shares outstanding). Management laid out long term guidance of a common equity tier 1 (CET1) ratio of ~18%, and at least $5T of global wealth management (GWM) assets by 2028.
Norwegian Cruise Line Holdings Ltd. (NCLH) fell through the 100 and 200-day moving averages. Citi lowered its price target to $19 from $23 (16% upside).
Citigroup Inc. (C) declined on limited news.
Exhibit 3: Significant2 Detractors from Opportunity Equity Representative Account Performance, 2/2/24 - 2/9/24
| Name | Type | Net Return |
| Expedia Group, Inc. | Equity | -13.2% |
| OneMain Holdings, Inc. | Equity | -5.8% |
| UBS Group AG | Equity | -6.5% |
| Norwegian Cruise Line Holdings Ltd. | Equity | -7.4% |
| Citigroup Inc. | Equity | -2.8% |
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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