Opportunity Equity Weekly Update for 11/29/2024 – 12/6/2024

Amazon Rises on AWS Event while Energy Names Follow Crude Lower

Last week, the Opportunity Equity Strategy’s representative account rose 0.81%, underperforming the S&P 500’s 0.99% gain. (Exhibit 1). The strategy ended the week up 33.34% YTD, 400 basis points ahead of the S&P 500.

Exhibit 1: Performance of Opportunity Equity Representative Account Net of Fees, Versus S&P 500, Through 12/6/24¹

Time Period	Opportunity Equity Representative Account	S&P 500
Last Week (11/29 - 12/6)	0.81%	0.99%
MTD	0.81%	0.99%
QTD	14.20%	5.95%
YTD	33.34%	29.34%
1 Year	47.31%	35.75%
5 Year	10.19%	15.95%
10 Year	9.45%	13.41%
Inception (annualized since 6/26/00)	8.00%	8.05%

Amazon.com, Inc. (AMZN) reached a new all-time high following the company’s AWS event. Amazon announced significant progress with their custom CPU, Graviton, and two AI chips, Trainium and Inferentia. Over 50% of AWS data centers are running on Graviton, and large customers, including Apple, spoke to the cost savings achieved from their use of Trainium and Inferentia. Amazon announced general availability for Trainium 2 which they expect will deliver 30-40% better price performance than their current generation and laid out guidance for a Trainium 3 launch next year. They believe Trainium 3 has the potential to deliver 2x more computing power than Trainium 2. Wedbush increased their 4Q AWS growth estimate to 20% y/y versus 19.3% expected and increased their price target from $225 to $250 (10% upside).

Coinbase Global, Inc. (COIN) reached a new 52-week high, following Bitcoin’s 3.19% climb above $100K. Goldman Sachs raised their price target from $183 to $397.

Meta Platforms, Inc. (META) rose through the 50-day moving average and reached a new all-time high. JP Morgan upgraded the name from “neutral” to “overweight”. JPM believes the company’s cashflow generation justifies their CAPEX spend and are impressed with their proven ability to monetize AI.

QXO, Inc. (QXO) rose on limited news.

Evercore released an updated search share report on Alphabet Inc. (GOOGL). Since June, the company has seen an impressive increase in Google Gemini adoption and satisfaction. Adoption rose from 40% to 62% while users who described themselves as “extremely satisfied” rose from 56% to 62%. Additionally, the company announced their plan to bring Waymo to Miami by 2026 with testing set to begin in early 2025.

Exhibit 2: Significant² Contributors to Opportunity Equity Representative Account Performance, 11/29/24 - 12/6/24

Name	Type	Net Return
Amazon.com, Inc.	Equity	9.2%
Coinbase Global, Inc.	Equity	16.0%
Meta Platforms, Inc.	Equity	8.6%
QXO, Inc.	Equity	4.5%
Alphabet Inc.	Equity	3.4%

Kosmos Energy Ltd. (KOS) reached a new 52-week low, and Seadrill Limited (SDRL) fell through the 50-day moving average, both following Brent’s -2.5% move lower.

CVS Health Corp (CVS) fell through the 50-day and 100-day moving averages. Cowen increased their price target from $73 to $80 and included CVS in their best ideas for 2025. They expect a strong turnaround in the company’s Medicare Advantage (MA) business and believe there’s a path for mid-teens adj. EPS growth.

Dave & Buster's Entertainment, Inc. (PLAY) fell on limited news.

RBC raised their price target on Energy Transfer LP (ET) from $20 to $23 (19% upside). RBC expects increasing natural gas demand from power plants and data centers to be a long-term tailwind for ET, noting the company has already received requests to connect 45 power plants and more than 40 data centers.

Exhibit 3: Significant² Detractors from Opportunity Equity Representative Account Performance, 11/29/24 - 12/6/24

Name	Type	Net Return
Kosmos Energy Ltd.	Equity	-12.2%
CVS Health Corp	Equity	-7.5%
Dave & Buster's Entertainment, Inc.	Equity	-6.2%
Seadrill Limited	Equity	-5.4%
Energy Transfer LP	Equity	-3.0%

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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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