Nvidia Jumps on Strong Earnings While Peloton Falls on Debt Refinancing
Last week, the Opportunity Equity Strategy's representative account fell 2.01%, underperforming the S&P 500’s 0.05% gain. (Exhibit 1). The strategy ended the week up 8.92% YTD, 293 basis points behind the S&P 500.Exhibit 1: Performance of Opportunity Equity Representative Account Net of Fees, Versus S&P 500, Through 5/24/241
| Time Period | Opportunity Equity Representative Account | S&P 500 |
| Last Week (5/17 - 5/24) | -2.01% | 0.05% |
| MTD | 2.58% | 5.48% |
| QTD | -2.87% | 5.48% |
| YTD | 8.92% | 11.85% |
| 1 Year | 38.44% | 30.89% |
| 5 Year | 10.17% | 15.31% |
| 10 Year | 8.26% | 12.89% |
| Inception (annualized since 6/26/00) | 7.27% | 7.58% |
Source: Bloomberg, Patient Capital Management.
Nvidia Corp, (NVDA) reached a new all-time high on Friday after reporting revenue growth of 262% YoY and adjusted EPS growth of 462% YoY, beating consensus on both the top and bottom line. The company delivered revenue of $26.04B vs. $24.69B expected and adjusted EPS of $6.12 vs. $5.65 expected. Nvidia increased their quarterly dividend by 150% from $0.04 to $0.10 (0.01% yield). The company laid out guidance for $28B in revenue next quarter (+107% YoY) with additional guidance implying EPS of $6.22 (+130% YoY). Wells Fargo increased their price target from $1,150 to $1,250 (17% upside) and Bank of America increased their price target from $1,100 to $1,320 (24% upside)
Coinbase Global, Inc. (COIN) rose through the 50-day moving average, following bitcoin prices higher throughout the week.
Crocs, Inc. (CROX) and Canada Goose Holdings Inc. (GOOS) both rose on limited news.
PureTech Health plc (PRTC LN) rose after launching a $100M tender offer to repurchase roughly 12% of the company’s shares outstanding.
Exhibit 2: Significant2 Contributors to Opportunity Equity Representative Account Performance, 5/17/24 - 5/24/24
| Name | Type | Net Return |
| Nvidia Corp | Equity | 15.1% |
| Coinbase Global, Inc. | Equity | 14.5% |
| Crocs, Inc. | Equity | 5.7% |
| Canada Goose Holdings Inc. | Equity | 5.2% |
| PureTech Health plc | Equity |
3.7% |
Source: Patient Capital Management. See below for additional information.
IAC Inc. (IAC) fell through the 50-day, 100-day, and 200-day moving averages on limited news.
Alibaba Group Holding Ltd (BABA) followed the Hang Seng lower throughout the week. On Friday, the company issued $5B in putable convertible notes to fund share repurchases. Deutsche Bank increased their price target from $116 to $125 (54% upside)
Peloton Interactive, Inc. (PTON) fell through the 50-day moving average after refinancing an existing term loan and announcing a private callable convertible note offering. Baird increased their price target from $3.50 to $4.00 (27% upside).
S4 Capital plc (SFOR LN) fell through the 200-day moving average on limited news.
Green Thumb Industries Inc. (GTBIF) fell through the 100-day and 200-day moving averages on limited news.
Exhibit 3: Significant2 Detractors from Opportunity Equity Representative Account Performance, 5/17/24 - 5/14/24
| Name | Type | Net Return |
| IAC Inc. | Equity | -9.7% |
| Alibaba Group Holding Ltd | Equity | -8.2% |
| Peloton Interactive, Inc. | Equity | -19.6% |
| S4 Capital plc | Equity | -13.6% |
| Green Thumb Industries Inc. | Equity | -13.2% |
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.
©2024 Patient Capital Management, LLC
Share