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Feb 23, 2024

Opportunity Equity Weekly Update for 2/16/2024 – 2/23/2024

William Keenan

Travel + Leisure Rises on Earnings while Coinbase Follows Bitcoin Prices Lower

Last week, the Opportunity Equity Strategy's representative account gained 2.01%, outperforming the S&P 500’s 1.68% rise. (Exhibit 1). The strategy ended the week up 4.44% YTD, 247 basis points behind the S&P 500.

Exhibit 1: Performance of Opportunity Equity Representative Account Net of Fees, Versus S&P 500, Through 2/23/241

Time Period Opportunity Equity Representative Account S&P 500
Last Week (2/16 - 2/23) 2.01% 1.68%
MTD 5.55% 5.15%
QTD 4.44% 6.91%
YTD 4.44% 6.91%
1 Year 25.38% 28.88%
5 Year 6.86% 14.67%
10 Year 7.71% 12.82%
Inception (annualized since 6/26/00) 7.16% 7.46%
Source: Bloomberg, Patient Capital Management.

United Airlines Holdings, Inc. (UAL) rose above the 200-day moving average. Bloomberg news reported that United is in talks with lessors to acquire additional Airbus A321neo aircraft as soon as next year, as a result of continued delays in deliveries of Boeing’s 737 Max 10. The airline also announced its intention to resume flights to Tel Aviv, Israel in March.

Travel + Leisure Co. (TNL) rose after reporting solid 4Q results. Revenue missed at $935M vs. $944M expected. EBITDA beat at $240M vs. $237M expected, while EPS beat $1.98 vs. $1.37 expected. Guidance also fell short of expectations with 1Q 2024 EBITDA at $188M at the midpoint vs. $186M for consenus, while FY 2024 EBITDA guidance was roughly in-line at $920M at the midpoint vs. $932M expected. During FY 2023, Travel + Leisure repurchased $307M worth of shares (9.9% of shares outstanding). The company also announced it would raise its annual dividend to $2.00 per share, up from $1.80 (4.4% yield). Barclays raised its price target to $44 from $37 (2% downside), while Deutsche Bank raised its price target to $61 from $52 (35% upside).

S&P Dow Jones Indices announced, Inc. (AMZN) would be joining the Dow Jones Industrial Average, replacing Walgreens Boots Alliance.

PureTech Health PLC (PRTC) rose above the 200-day moving average.

Exhibit 2: Significant2 Contributors to Opportunity Equity Representative Account Performance, 2/16/24 - 2/23/24

Name Type Net Return
United Airlines Holdings, Inc. Equity 8.4%
Travel & Leisure Co. Equity 9.2%
*New Security* Equity 8.5%, Inc. Equity 3.2%
PureTech Health PLC Equity

Source: Patient Capital Management. See below for additional information.

Coinbase Global, Inc. (COIN) followed bitcoin prices lower over the course of the week.

Bloomberg News reported that Peloton Interactive, Inc. (PTON) and shareholders had reached preliminary approval for a $14M class action settlement, after the company allegedly did not disclose serious safety issues with its treadmill product.

Illumina, Inc. (ILMN) fell through the 50-day moving average.

Western Alliance Bancorporation (WAL) declined on limited news.

SoFi Technologies, Inc. (SOFI) declined on limited news.

Exhibit 3: Significant2 Detractors from Opportunity Equity Representative Account Performance, 2/16/24 - 2/23/24

Name Type Net Return
Coinbase Global, Inc. Equity -7.9%
Illumina, Inc. Equity -7.3%
Peloton Interactive, Inc Equity -4.2%
Western Alliance Bancorporation Equity -3.5%
SoFi Technologies, Inc. Equity -2.3%
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