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Mar 19, 2024

Opportunity Equity Weekly Update for 3/8/2024 – 3/15/2024

William Keenan

Alphabet Rises on Autonomous Driving Unit while Coinbase Follows Bitcoin Prices Lower

Last week, the Opportunity Equity Strategy's representative account fell -0.67%, underperforming the S&P 500’s -0.09% decline. (Exhibit 1). The strategy ended the week up 5.82% YTD, 181 points behind the S&P 500. 

Exhibit 1: Performance of Opportunity Equity Representative Account Net of Fees, Versus S&P 500, Through 3/15/241

Time Period Opportunity Equity Representative Account S&P 500
Last Week (3/8 - 3/15) -0.67% -0.09%
MTD 0.37% 0.48%
QTD 5.82% 7.63%
YTD 5.82% 7.63%
1 Year 43.70% 33.59%
5 Year 8.02% 14.54%
10 Year 7.73% 12.85%
Inception (annualized since 6/26/00) 7.20% 7.47%
Source: Bloomberg, Patient Capital Management.

Alphabet Inc. (GOOGL) moved through the 100-day moving average after announcing the debut of their autonomous driving unit, Waymo. Waymo was made available to select members of the public in Los Angeles as of March 14th with plans to expand into Austin, Texas later this year. Alphabet also announced their plans to deploy generative AI tools for clinicians at the HIMSS 24 conference. These tools will assist clinicians in scanning patient notes, documents, and other clinical data.

UBS Group AG (UBS) reached a new 52-week high after announcing job cuts in their Asia private wealth unit.

General Motors Company (GM) rose throughout the week after receiving federal funds to further their production and research into hydrogen fuel cell cars. General Motors hired Jens Peter Clausen, previously an Alphabet and Tesla executive to take over as the head of Global Manufacturing and Sustainability. Piper Sandler initiated coverage with a $44 price target (8% upside).

Green Thumb Industries Inc. (GTBIF) moved through the 50-day moving average on rumors that the DEA may reschedule cannabis from a schedule 1 to a schedule 3 drug.

Seadrill Limited (SDRL) followed oil prices higher over the course of the week.

Exhibit 2: Significant2 Contributors to Opportunity Equity Representative Account Performance, 3/8/24 - 3/15/24

Name Type Net Return
Alphabet Inc. Equity 4.3%
UBS Group AG Equity 3.5%
General Motors Company Equity 3.0%
Green Thumb Industries Inc. Equity 6.4%
Seadrill Limited Equity

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

Precigen, Inc. (PGEN) fell through the 50-day moving average.

Meta Platforms, Inc. (META) filed a lawsuit against a former VP for taking highly sensitive documents pertaining to Meta’s business and employees to an AI startup. Mark Zuckerberg sold $114.2M in shares from the Chan Zuckerberg Initiative.

Coinbase Global, Inc (COIN) followed Bitcoin prices lower on the week. Coinbase priced a $1.1B 0.25% convertible senior notes offering due 2030. While the issue has a strike price of $333.54, the company entered into a capped call option to synthetically raise the dilution threshold to $503.46. The proceeds will be used to redeem outstanding 2026 and 2028 notes along with general corporate purposes. JP Morgan raised their price target from $95 to $150 (-38% downside).

SoFi Technologies, Inc. (SOFI) continued to fall following the company’s latest debt offering.

Peloton Interactive, Inc (PTON) announced a new partnership with the global dance music institution, Defected Records. Starting March 21st, select rides will feature live DJ performances. Morgan Stanley initiated coverage with a $3 price target (-31% downside).

Exhibit 3: Significant2 Detractors from Opportunity Equity Representative Account Performance, 3/8/24 - 3/15/24

Name Type Net Return
Precigen, Inc. Equity -18.3%
Meta Platforms, Inc. Equity -4.3%
Coinbase Global, Inc. Equity -5.6%
SoFi Technologies, Inc. Equity -8.8%
Peloton Interactive, Inc. Equity -7.7%
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