S4 Rises on Takeover Interest while Meta Falls on Limited News
Last week, the Opportunity Equity Strategy's representative account rose 1.87%, outperforming the S&P 500’s 0.40% rise. (Exhibit 1). The strategy ended the week up 12.14% YTD, 158 basis points ahead the S&P 500.Exhibit 1: Performance of Opportunity Equity Representative Account Net of Fees, Versus S&P 500, Through 3/28/241
| Time Period | Opportunity Equity Representative Account | S&P 500 |
| Last Week (3/22 - 3/28) | 1.87% | 0.40% |
| MTD | 6.36% | 3.22% |
| QTD | 12.14% | 10.56% |
| YTD | 12.14% | 10.56% |
| 1 Year | 49.92% | 34.42% |
| 5 Year | 9.78% | 15.21% |
| 10 Year | 8.52% | 13.05% |
| Inception (annualized since 6/26/00) | 7.45% | 7.58% |
Source: Bloomberg, Patient Capital Management.
S4 Capital PLC (SFOR LN) rose above the 100-day moving average after reporting 2H FY 2023 results and ODDO BHF highlighting that the company’s low valuation is drawing takeover interest. FY 2023 revenue came in at £1.0B vs £957M expected, while EBITDA came in at £94M vs £92M expected. EPS came in in-line with consensus expectations at 6p. S4 guided for FY 2024 revenues to be down y/y, with EBITDA generation to be “broadly similar” compared to 2023. S4 named former Ernst & Young consultant Jean-Benoit Berty as its new COO, while existing senior executives Christopher Martin, Victor Knapp, Wes ter Haar and Scott Spirit will retire from the board of directors. Citi lowered its price target to £2.30 from £2.50 (337% upside).
Citigroup Inc. (C) rose as it concluded its initial multiyear organizational and restructuring effort, with Wells Fargo raising its price target from $70 to $80 (27% upside) on this latest milestone.
General Motors Company (GM) announced it is working to re-route vehicle shipments after the Baltimore bridge collapse.
Delta Air Lines, Inc. (DAL) rose on limited news.
OneMain Holdings, Inc. (OMF) rose on limited news.
Exhibit 2: Significant2 Contributors to Opportunity Equity Representative Account Performance, 3/22/24 - 3/28/24
| Name | Type | Net Return |
| S4 Capital PLC | Equity | 24.7% |
| Delta Air Lines, Inc. | Equity | 5.0% |
| Citigroup Inc. | Equity | 4.0% |
| General Motors Company | Equity | 5.3% |
| OneMain Holdings, Inc. | Equity |
2.7% |
Source: Patient Capital Management. See below for additional information.
Filings revealed that Meta Platforms, Inc. (META) CEO and Founder Mark Zuckerberg sold ~77,000 shares worth $39.1M through the Chan Zuckerberg Initiative foundation.
Uber Technologies, Inc. (UBER) announced it would begin prescription drug delivery in Japan via its Uber Eats platform. Truist raised its price target to $94 from $90 (22% upside).
UBS Group AG (UBS) announced an agreement to sell $8B of legacy Credit Suisse secured financing facilities to Apollo Global Management. This marks the final carve out of the former Credit Suisse securitized products business, Atlas SP.
Exhibit 3: Significant2 Detractors from Opportunity Equity Representative Account Performance, 3/22/24 - 3/28/24
| Name | Type | Net Return |
| Meta Platforms, Inc. | Equity | -4.7% |
| *New Security* | Equity | -4.2% |
| Uber Technologies, Inc. | Equity | -4.0% |
| UBS Group, Inc. | Equity | -1.7% |
| *New Security* | Equity | -1.1% |
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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