Opportunity Equity Weekly Update for 10/18/2024 – 10/25/2024

General Motors Rises on Strong Earnings While Coinbase Follows Bitcoin Lower

Last week, the Opportunity Equity Strategy’s representative account fell -1.07%, underperforming the S&P 500’s -0.96% loss. (Exhibit 1). The strategy ended the week up 20.82% YTD, 232 basis points behind the S&P 500.

Exhibit 1: Performance of Opportunity Equity Representative Account Net of Fees, Versus S&P 500, Through 10/25/24¹

Time Period	Opportunity Equity Representative Account	S&P 500
Last Week (10/18 - 10/25)	-1.07%	-0.96%
MTD	3.47%	0.87%
QTD	3.47%	0.87%
YTD	20.82%	23.14%
1 Year	56.41%	40.75%
5 Year	10.25%	15.80%
10 Year	9.10%	13.51%
Inception (annualized since 6/26/00)	7.60%	7.87%

SoFi Technologies, Inc. (SOFI) reached a new 52-week high after Jefferies reported a bullish landscape for fintech companies. They believe expected rate cuts, an improving credit environment, and record high spreads between credit card vs. personal loans are all tailwinds for the industry. Mizuho increased their price target from $12 to $14 (27% upside).

General Motors Co (GM) reached a new 52-week high after a strong print, posting revenue of $48.8B vs. $44.7B expected and EPS of $2.96 vs. $2.43 expected. The company raised their full year operating income guidance from $14B to $14.5B at the midpoint and repurchased 23M shares (~2% shares outstanding). JP Morgan increased their price target from $64 to $70 (34% upside).

Seadrill Limited (SDRL) rose on talks of a potential merger with Transocean Ltd. The combined company would become the largest offshore operator. Stifel estimates a potential takeout price of ~$55 (41% upside). Citi lowered their price target before the announcement from $52 to $48 (23% upside) but maintained their buy rating.

Nvidia Corp (NVDA) reached a new 52-week high on Monday after Taiwan Semiconductor Manufacturing delivered a beat and raise the week prior.

David Einhorn, founder of Greenlight Capital, pitched Peloton Interactive, Inc. (PTON) at the Robin Hood Investors Conference. He believes the company is undervalued given their large customer base and low attrition rate. Even if the company cannot cut costs under a new CEO, he thinks they are an attractive takeout target for a larger company.  

Exhibit 2: Significant² Contributors to Opportunity Equity Representative Account Performance, 10/18/24 - 10/25/24

Name	Type	Net Return
SoFi Technologies, Inc.	Equity	8.0%
General Motors Co	Equity	5.9%
Seadrill Limited	Equity	6.0%
Nvidia Corp	Equity	2.6%
Peloton Interactive, Inc.	Equity	7.5%

IAC Inc. (IAC) fell through the 50-day and 100-day moving averages on limited news.

Canada Goose Holdings Inc. (GOOS) fell through the 50-day moving average. UBS lowered their price target from $13 to $12 (17% upside) but maintained their neutral rating.

Baird raised their price target on Alibaba Group Holding Ltd (BABA) from $88 to $110 (13% upside).  

Coinbase Global, Inc. (COIN) followed Bitcoin’s -2.41% move lower.

CVS Health Corp (CVS) fell through the 50-day and 100-day moving averages, continuing its move lower following the suspension of FY24 guidance and the announcement of a new CEO last week.

Exhibit 3: Significant² Detractors from Opportunity Equity Representative Account Performance, 10/18/24 - 10/25/24

Name	Type	Net Return
IAC Inc.	Equity	-5.0%
Canada Goose Holdings Inc.	Equity	-9.1%
Alibaba Group Holding Ltd	Equity	-4.9%
Coinbase Global, Inc.	Equity	-6.9%
CVS Health Corp	Equity	-5.3%

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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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