Opportunity Equity Weekly Update for 10/11/2024 – 10/18/2024

Norwegian Jumps as Citi Gets Bullish While Dave and Buster’s Falls Despite Insider Buying

Last week, the Opportunity Equity Strategy’s representative account gained 1.87%, outperforming the S&P 500’s 0.87% rise. (Exhibit 1). The strategy ended the week up 22.13% YTD, 220 basis points behind the S&P 500.

Exhibit 1: Performance of Opportunity Equity Representative Account Net of Fees, Versus S&P 500, Through 10/18/24¹

Time Period	Opportunity Equity Representative Account	S&P 500
Last Week (10/11 - 10/18)	1.87%	0.87%
MTD	4.60%	1.84%
QTD	4.60%	1.84%
YTD	22.13%	24.33%
1 Year	50.72%	37.92%
5 Year	11.15%	16.31%
10 Year	9.83%	14.08%
Inception (annualized since 6/26/00)	7.65%	7.92%

United Airlines Holdings, Inc. (UAL) reached a new 52-week high on Friday after beating on the top and bottom line, delivering revenue of $14.8B vs. $14.7B expected and adjusted EPS of $3.33 vs $3.07 expected. The company repurchased 2M shares during the quarter (~0.6% shares out) and approved a $1.5B buyback plan (~6.2% current market cap). JP Morgan increased their price target from $100 to $108 (46% upside).

Coinbase Global, Inc. (COIN) broke through the 50-day, 100-day, and 200-day moving averages, following Bitcoin’s 8.6% rise. Citi decreased their price target from $345 to $275 (25% upside) but maintained their buy rating. They believe the company faces additional competition from ETFs and an ambiguous regulatory environment with the pending election.

Citi increased their price target on SoFi Technologies, Inc. (SOFI) from $11 to $12.50 (23% upside) after the company announced the expansion of their loan platform business. Sofi entered a $2B agreement for personal loans with funds managed by Fortress Investment Group.  

Expedia Group, Inc. (EXPE) reached a new 52-week high after the Financial Times reported that Uber had explored a takeover bid for the company. Uber’s CEO, Dara Khosrowshahi led Expedia from 2005 – 2017.

Delta Air Lines, Inc. (DAL) reached a new 52-week high after announcing earnings the week prior. Jefferies lowered their price target from $60 to $58 (4% upside) but maintained their buy rating. 


Exhibit 2: Significant² Contributors to Opportunity Equity Representative Account Performance, 10/11/24 - 10/18/24

Name	Type	Net Return
United Airlines Holdings, Inc.	Equity	20.0%
Coinbase Global, Inc.	Equity	24.8%
SoFi Technologies, Inc.	Equity	13.0%
Expedia Group, Inc.	Equity	6.1%
Delta Air Lines, Inc.	Equity	8.7%

CVS Health Corp (CVS) fell through the 200-day moving average after revising their 3Q EPS estimate downwards, suspending their FY2024 guidance provided on 8/7/2024, and replacing their CEO with David Joyner, the previous CVS Caremark President.

Barclays increased their price target on Alibaba Group Holding Ltd (BABA) from $107 to $137 (34% upside). They expect the spread between gross merchandise value (GMV) and customer management revenue (CMR) to narrow as monetization improves under their new ad platform. Barclays is forecasting mid-single digit GMV growth and low-single digit CMR growth for the September quarter.

Citigroup Inc. (C) fell despite a solid beat, printing revenue of $20.3B vs. 19.8B expected and EPS of $1.51 vs. $1.31 expected. The company remains on track to reach their full year revenue guidance of $80B-$81B. Bank of America increased their price target from $77 to $78 (24% upside).

Kosmos Energy Ltd. (KOS) followed Brent’s -7.6% move lower.

Wells Fargo lowered their price target on Canada Goose Holdings Inc. (GOOS) from $11.55 to $8.70 (-23% downside) while putting an underweight rating on the name. Wells Fargo believes the company is facing multiple near term headwinds, including weak search trends, China macro concerns, and an unclear brand direction.

Exhibit 3: Significant² Detractors from Opportunity Equity Representative Account Performance, 10/11/24 - 10/18/24

Name	Type	Net Return
CVS Health Corp	Equity	-9.0%
Alibaba Group Holding Ltd	Equity	-6.9%
Citigroup Inc.	Equity	-4.4%
Kosmos Energy Ltd.	Equity	-4.9%
Canada Goose Holdings Inc.	Equity	-5.1%

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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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