Norwegian Rises on Earnings while Green Thumb Declines on Earnings
Last week, the Opportunity Equity Strategy's representative account gained 2.06%, outperforming the S&P 500’s 0.99% rise. (Exhibit 1). The strategy ended the week up 6.59% YTD, 138 basis points behind the S&P 500.Exhibit 1: Performance of Opportunity Equity Representative Account Net of Fees, Versus S&P 500, Through 3/1/241
| Time Period | Opportunity Equity Representative Account | S&P 500 |
| Last Week (2/23 - 3/1) | 2.06% | 0.99% |
| MTD | 1.10% | 0.81% |
| QTD | 6.59% | 7.97% |
| YTD | 6.59% | 7.97% |
| 1 Year | 29.03% | 32.12% |
| 5 Year | 7.55% | 14.79% |
| 10 Year | 7.76% | 12.79% |
| Inception (annualized since 6/26/00) | 7.25% | 7.50% |
Source: Bloomberg, Patient Capital Management.
Coinbase Global, Inc. (COIN) followed bitcoin prices higher over the course of the week.Norwegian Cruise Line Holdings Ltd. (NCLH) rose above the 50, 100, and 200-day moving averages after announcing 4Q results and guidance that were ahead of consensus expectations. The company reported revenue of $1.99B above consensus of $1.97B while adjusted EBITDA of $360M was better than expectations at $357M. EPS missed -$0.18 vs -$0.13 for the street. 1Q 2024 profitability guidance was well ahead at $0.12 in adjusted EPS vs. -$0.18 expected, while EBITDA was also ahead at $450M vs. $330M for consensus. For the full year, Norwegian guided for EBITDA of $2.2B in-line with consensus, and EPS of $1.23 vs. $1.21 for the street. Truist raised its price target to $20 from $17 (4% upside), while Deutsche Bank raised its price target to $18 from $14 (-7% downside).
OneMain Holdings, Inc. (OMF) rose above the 50-day moving average. CEO Doug Shulman spoke at the Bank of America financials conference, where he reiterated the company’s medium term loan growth target of 3%-5%, while maintaining its $30B long-term receivables target driven by growth in its emerging auto lending and credit card businesses.
SoFi Technologies, Inc. (SOFI) CFO Chris Lapointe spoke at the UBS Financial Services Conference, where he reiterated the firm’s target compounded annual revenue growth rate of 20%-25% through 2026, highlighting that 65% of loans are funded with SoFi’s differentiated deposit offering. In its technology platform, the company plans to move upstream to large financial institutions, beyond its original customer base of smaller fintechs and neobanks.
Precigen, Inc. (PGEN) rose on limited news.
Exhibit 2: Significant2 Contributors to Opportunity Equity Representative Account Performance, 2/23/24 - 3/1/24
| Name | Type | Net Return |
| Coinbase Global, Inc. | Equity | 24.0% |
| Norwegian Cruise Line Holdings Ltd. | Equity | 9.2% |
| OneMain Holdings, Inc. | Equity | 4.8% |
| Precigen, Inc. | Equity | 15.8% |
| SoFi Technologies, Inc. | Equity |
10.0% |
Source: Patient Capital Management. See below for additional information.
Alphabet Inc. (GOOGL) fell though the 50 and 100-day moving averages as CEO Sundar Pichai publicly acknowledged defects in the company’s new AI chatbot, Gemini.
Green Thumb Industries Inc. (GTBIF) fell despite solid quarterly earnings. The company reported revenue of $278M vs $270M expected with adjusted EBITDA of $91M ahead of consensus at $79M, leading to GAAP EPS of $0.01 in-line with consensus. During the quarter, the company repurchased $25M of its senior debt and $15M of its shares (0.6% of shares outstanding). Concurrent with its 4Q results, Green Thumb’s Board of Directors authorized an additional $50M share repurchase program, bringing the total authorization to $60M (2.2% of shares outstanding). Roth MKM raised its price target to $21 from $16 (61% upside), while Craig Hallum raised its price target to $16 from $14 (23% upside).
CVS Health Corporation (CVS) fell through the 50-day moving average. Leerink initiated coverage with an $88 price target (19% upside).
PureTech Health PLC (PRTC) founded entity Akili, Inc. announced that its Japanese partner Shionogi & Co. Ltd has submitted Akili's digital therapeutic SDT-001 for marketing approval with the Japanese Ministry of Health, Labor, and Welfare. SDT-001 is the Japanese version of Akili's AKL-T01, which has previously been authorized by the U.S. Food and Drug Administration (FDA) for improving attentional functioning in pediatric ADHD patients aged 8 to 17.
Royalty Pharma PLC (RPRX) declined on limited news.
Exhibit 3: Significant2 Detractors from Opportunity Equity Representative Account Performance, 2/23/24 - 3/1/24
| Name | Type | Net Return |
| Alphabet Inc. | Equity | -4.7% |
| Green Thumb Industries Inc. | Equity | -8.6% |
| CVS Health Corporation | Equity | -4.4% |
| PureTech Health PLC | Equity | -5.6% |
| Royalty Pharma PLC | Equity | -3.5% |
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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