Citi Rose on The Fed’s Rate Cut while S4 Capital Fell Despite Improved Margins
Last week, the Opportunity Equity Strategy’s representative account gained 3.64%, outperforming the S&P 500’s 1.39% rise. (Exhibit 1). The strategy ended the week up 14.70% YTD, 608 basis points behind the S&P 500.Exhibit 1: Performance of Opportunity Equity Representative Account Net of Fees, Versus S&P 500, Through 9/20/241
| Time Period | Opportunity Equity Representative Account | S&P 500 |
| Last Week (9/13 - 9/20) | 3.64% | 1.39% |
| MTD | 1.40% | 1.05% |
| QTD | 4.06% | 4.76% |
| YTD | 14.70% | 20.78% |
| 1 Year | 33.36% | 31.45% |
| 5 Year | 9.83% | 15.62% |
| 10 Year | 8.23% | 13.05% |
| Inception (annualized since 6/26/00) | 7.40% | 7.82% |
Source: Bloomberg, Patient Capital Management.
Citigroup Inc. (C) moved through the 50-day moving average after The Fed’s decision to cut the federal funds target rate by 50bps.
Morningstar raised their price target on Meta Platforms, Inc. (META) from $450 to $560 (0% downside), calling out the company’s wide moat, scale, and improved product lineup.
Expedia Group, Inc. (EXPE) rose on limited news.
OneMain Holdings, Inc. (OMF) moved through the 50-day, 100-day, and 200-day moving average on The Fed’s interest rate cut. The company also released better than expected August Trust data. Delinquencies came in at +5bps m/m, beating the historical August average of +10bps m/m while y/y delinquencies ticked down from +70bps y/y in July to +55bps y/y in August.
Norwegian Cruise Line Holdings Ltd. (NCLH) rose after JP Morgan reported strong industry demand and no softening of the booking curve following their cruise line conference. JP Morgan increased their price target from $23 to $25 (20% upside).
Exhibit 2: Significant2 Contributors to Opportunity Equity Representative Account Performance, 9/13/24 - 9/20/24
| Name | Type | Net Return |
| Citigroup Inc. | Equity | 7.7% |
| Meta Platforms, Inc. | Equity | 7.1% |
| Expedia Group, Inc. | Equity | 6.1% |
| OneMain Holdings, Inc. | Equity | 7.2% |
| Norwegian Cruise Line Holdings Ltd. | Equity | 8.1% |
Source: Patient Capital Management. See below for additional information.
Nvidia Corp (NVDA) fell through the 50-day moving average on limited news.
S4 Capital plc (SFOR LN) fell after reporting mixed interim results. Revenue came in at £376.1M vs. £381.8 expected while EBITDA came in at £30.1M vs. £28.7M expected. The company guided for improved FY24 EBITDA margins and reiterated their commitment to deploying free cash flow over the longer term. Jefferies lowered their price target from 80GBp to 55 GBp (30% upside) while maintaining their buy rating.
Precigen, Inc. (PGEN), Royalty Pharma plc (RPRX), and CVS Health Corp (CVS) fell on limited news.
Exhibit 3: Significant2 Detractors from Opportunity Equity Representative Account Performance, 9/13/24 - 9/20/24
| Name | Type | Net Return |
| Nvidia Corp | Equity | -2.6% |
| S4 Capital plc | Equity | -6.0% |
| Precigen, Inc. | Equity | -5.2% |
| Royalty Pharma plc | Equity | -0.6% |
| CVS Health Corp | Equity | -0.8% |
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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