Opportunity Equity Weekly Update for 7/5/2024 – 7/12/2024

Expedia Rises on Increased Web Traffic while Delta Falls on Narrow Earnings Miss

Last week, the Opportunity Equity Strategy’s representative account gained 2.08%, outperforming the S&P 500’s 0.89% rise. (Exhibit 1). The strategy ended the week up 12.82% YTD, 579 basis points behind the S&P 500.
Exhibit 1: Performance of Opportunity Equity Representative Account Net of Fees, Versus S&P 500, Through 7/12/24¹

Time Period	Opportunity Equity Representative Account	S&P 500
Last Week (7/5 - 7/12)	2.08%	0.89%
MTD	2.35%	2.88%
QTD	2.35%	2.88%
YTD	12.82%	18.61%
1 Year	20.02%	27.46%
5 Year	9.23%	15.12%
10 Year	8.13%	13.13%
Inception (annualized since 6/26/00)	7.39%	7.80%

 

Norwegian Cruise Line Holdings Ltd. (NLCH) rose through the 100-day moving average as concerns surrounding hurricane Beryl subsided. Barclays reported that cruise demand remains strong and continues to outperform other travel experiences.
 
Expedia Group, Inc. (EXPE) rose through the 100-day and 200-day moving averages after Wells Fargo reported stronger web traffic trends and increased their 2H gross bookings estimate. Wells Fargo also increased their price target from $137 to $140 (6% upside).  

General Motors Co (GM) reached a new 52-week high on limited news. UBS increased their price target from $61 to $64 (31% upside)

JMP initiated coverage on IAC Inc. (IAC) with a $78 price target (60% upside).

Alibaba Group Holdings Ltd. (BABA) followed the Hang Seng higher for the second straight week, moving through the 50-day, 100-day, and 200-day moving averages. Jefferies increased their price target from $114 to $116 (46% upside).

Exhibit 2: Significant² Contributors to Opportunity Equity Representative Account Performance, 7/5/24 - 7/12/24

Name	Type	Net Return
Norwegian Cruise Line Holdings Ltd.	Equity	11.7%
Expedia Group, Inc.	Equity	6.5%
General Motors Co	Equity	5.4%
IAC Inc.	Equity	4.9%
Alibaba Group Holding Ltd	Equity	6.9%

Wells Fargo increased their price target for Meta Platforms, Inc. (META) from $593 to $625 (25% upside)

Amazon.com Inc. (AMZN) hosted an AWS summit on Wednesday. The company announced two new AI agents within the Bedrock tech stack, memory retention and support for code interpretation. The company also reported that 90% of Forbes AI 50 are running on AWS. TD Cowen increased their price target from $225 to $245 (26% upside)

Alphabet Inc. (GOOGL) fell despite gaining search share for the second consecutive month, both globally and in the US. Goldman Sachs increased their price target from $195 to $211 (14% upside).

Delta Air Lines, Inc. (DAL) fell after reporting a narrow revenue miss of $15.41B vs. $15.43B expected and adjusted EPS of $2.36 vs. $2.38 expected. The company reiterated their prior 2024 guidance of $6.00 - $7.00 in adjusted EPS and free cashflow of $3.5B at the midpoint. The company reported diverse revenue growth, including loyalty travel awards (8% YoY), premium cabin (10% YoY), and travel-related services (9% YoY). Bernstein decreased their price target from $66 to $62 (42% upside).

United Airlines Holdings, Inc. (UAL) fell in sympathy with Delta.

Exhibit 3: Significant² Detractors from Opportunity Equity Representative Account Performance, 7/5/24 - 7/12/24

Name	Type	Net Return
Meta Platforms, Inc.	Equity	-7.6%
Amazon.com, Inc.	Equity	-2.8%
Alphabet Inc.	Equity	-2.9%
Delta Air Lines, Inc.	Equity	-5.2%
United Airlines Holdings, Inc.	Equity	-4.9%

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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. 

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