Expedia Rises on B2B Growth while Seadrill Falls on Rig Delays
Last week, the Opportunity Equity Strategy’s representative account gained 0.06%, outperforming the S&P 500’s -0.02% loss. (Exhibit 1). The strategy ended the week up 5.10% YTD, 786 basis points behind the S&P 500.Exhibit 1: Performance of Opportunity Equity Representative Account Net of Fees, Versus S&P 500, Through 8/9/241
| Time Period | Opportunity Equity Representative Account | S&P 500 |
| Last Week (8/2 - 8/9) | 0.06% | -0.02% |
| MTD | -7.43% | -3.20% |
| QTD | -4.65% | -2.02% |
| YTD | 5.10% | 12.96% |
| 1 Year | 15.73% | 21.42% |
| 5 Year | 9.01% | 14.71% |
| 10 Year | 7.88% | 12.77% |
| Inception (annualized since 6/26/00) | 7.05% | 7.56% |
Source: Bloomberg, Patient Capital Management.
Expedia Group, Inc. (EXPE) rose through the 50-day and 100-day moving averages following a better than expected earnings report. The company delivered revenue of $3.55B vs. $3.53B expected, adjusted EBITDA of $786M vs. $749M expected, and adjusted EPS of $3.51 vs. $3.12 expected. The company’s B2B segment came in ahead of consensus, posting revenue of $1,049M (+22% YoY) vs. $993M expected (15% YoY). Notably, VRBO returned to growth at the end of the quarter. The company repurchased an additional $530M of stock during the quarter (3% of shares outstanding), bringing the year-to-date total to $1.2B (~7% of shares outstanding). The company lowered full year revenue expectations to 6% growth. Goldman Sachs increased their price target from $182 to $200 (54% upside).
Meta Platforms, Inc. (META) rose through the 50-day and 100-day moving averages following their strong earnings report from the week prior. Loop Capital increased their price target from $550 to $575 (11% upside).
IAC Inc. (IAC) rose through the 50-day moving average after delivering revenue of $949.5M vs. $942.7M expected and EBITDA of $87.3M vs. $76.8M expected. The company raised their full year EBITDA guidance from $370M to $373M at the midpoint. The company’s earnings were supported by ANGI’s improving profitability and Dotdash Meredith’s return to topline growth. Truist raised their price target from $87 to $88 (77% upside).
RBC Capital lowered their price target on General Motors Co (GM) from $58 to $54. (24% upside). Paul Jacobson, CFO, purchased 25K shares for ~$1.1M.
Crocs, Inc. (CROX) continued to rise after reporting strong earnings the week prior.
Exhibit 2: Significant2 Contributors to Opportunity Equity Representative Account Performance, 8/2/24 - 8/9/24
| Name | Type | Net Return |
| Expedia Group, Inc. | Equity | 12.6% |
| Meta Platforms, Inc. | Equity | 6.1% |
| IAC Inc. | Equity | 5.6% |
| General Motors Co | Equity | 5.6% |
| Crocs, Inc. | Equity | 7.3% |
Source: Patient Capital Management. See below for additional information.
QXO, Inc. (QXO) fell on limited news.
Precigen, Inc. (PGEN) fell after announcing a $30M equity offering. Along with the capital raise, the company announced a 20% reduction in their workforce, and a refocus on PRGN-2012 in recurrent respiratory papillomatosis (RRP). They will submit the BLA in 2H24. The capital raised should get them through BLA submission and into 2025.
Seadrill Limited (SDRL) fell through the 200-day moving average after reporting mixed results. The company beat on the top and bottom line, posting revenue of $375M vs. $359M expected and adjusted EBITDA of $133M vs $74M expected. However, the company lowered full year revenue guidance from $1,495M to $1,380M at the midpoint and EBITDA from $425 to $340M at the midpoint due to certain delays. The company continued to use excess cash for buybacks, purchasing $125M shares in the quarter (~1% of shares outstanding). Stifel lowered their price target from $73 to $70 (57% upside).
Royalty Pharma plc (RPRX) fell through the 50-day, 100-day, and 200-day moving averages despite a solid print, reporting inline portfolio receipts of $608M vs. $601M expected and adjusted EPS of $0.96 vs. $0.97 expected. The company raised their full year portfolio receipt guidance from $2,600M-$2,700M to $2,700M-$2,775M, (+16% YoY). The company stepped up their share repurchases, bringing their year-to-date total to $115M (~1% of shares outstanding). Morningstar lowered their price target from $52 to $47 (79% upside).
Canada Goose Holdings Inc. (GOOS) continued to fall after reporting lower than expected wholesale revenue growth the week prior. Bank of America lowered their price target from $10.16 to $10.00 (-2% downside).
Exhibit 3: Significant2 Detractors from Opportunity Equity Representative Account Performance, 8/2/24 - 8/9/24
| Name | Type | Net Return |
| QXO, Inc. | Equity | -6.9% |
| Precigen, Inc. | Equity | -20.3% |
| Seadrill Limited | Equity | -10.4% |
| Royalty Pharma plc | Equity | -8.0% |
| Canada Goose Holdings Inc. | Equity | -4.7% |
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.
©2024 Patient Capital Management, LLC
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