Dave & Buster’s Gains on Improved Expectations for Restaurant Industry while Kosmos Energy Followed Brent Prices Lower
Last week, the Opportunity Equity Strategy’s representative account gained 2.86%, outperforming the S&P 500’s 1.76% gain. (Exhibit 1). The strategy ended the week up 6.09% YTD, 228 basis points ahead of the S&P 500.Exhibit 1: Performance of Opportunity Equity Representative Account Net of Fees, Versus S&P 500, Through 1/24/251
Time Period | Opportunity Equity Representative Account | S&P 500 |
Last Week (1/17 - 1/24) | 2.86% | 1.76% |
MTD | 6.09% | 3.81% |
QTD | 6.09% | 3.81% |
YTD | 6.09% | 3.81% |
1 Year | 37.03% | 27.06% |
5 Year | 9.90% | 14.91% |
10 Year | 9.78% | 13.55% |
Inception (annualized since 6/26/00) | 7.99% | 8.02% |
Source: Bloomberg, Patient Capital Management.
Dave & Buster's Entertainment, Inc. (PLAY) rose after multiple analysts reported improved 2025 expectations for the restaurant industry following the ICR conference.
Scotiabank increased their price target on Amazon.com, Inc. (AMZN) from $246 to $306 (30% upside)
SoFi Technologies, Inc. (SOFI) reached a new 52-week high heading into earnings this week.
Precigen, Inc. (PGEN) rose through the 200-day moving average after HC Wainwright raised their price target from $4 to $6 (332% upside). They expect Precigen’s recurrent respiratory papillomatosis (RRP) treatment, PRGN-2012, to receive accelerated approval in 3Q25. This would be the first non-surgical treatment for RRP. HC Wainwright believes this could become the new standard of care.
Meta Platforms, Inc. (META) reached a new all-time high. Wedbush raised their price target from $680 to $700 (8% upside). They believe Meta will be the number one beneficiary if the U.S. bans Tik Tok. They also expect Meta will compound operating income at 13% over the next five years with additional upside potential from artificial intelligence.
Exhibit 2: Significant2 Contributors to Opportunity Equity Representative Account Performance, 1/17/25 - 1/24/25
Name | Type | Net Return |
Dave & Buster's Entertainment, Inc. | Equity | 14.2% |
Amazon.com, Inc. | Equity | 3.9% |
SoFi Technologies, Inc. | Equity | 8.6% |
Precigen, Inc. | Equity | 25.2% |
Meta Platforms, Inc. | Equity | 5.7% |
Source: Patient Capital Management. See below for additional information.
Expedia Group, Inc. (EXPE) fell through the 50-day moving average. Jefferies lowered their price target from $190 to $186 (9% upside) and maintained their “hold” rating. Jefferies cut their numbers on expected foreign exchange headwinds following the recent appreciation in the U.S. dollar versus other major currencies.
Norwegian Cruise Line Holdings Ltd. (NCLH) fell though the 50-day moving average. Goldman Sachs lowered their price target from $35 to $34 (32% upside) and maintained their “buy” rating. They believe the company still has a significant opportunity for cost savings.
Kosmos Energy Ltd. (KOS) followed Brent’s -2.83% move lower. Bank of America lowered their price target from $7 to $6 (75% upside) and maintained their buy rating.
QXO, Inc. (QXO) continued to fall after Beacon Roofing (BECN) reported they are exploring other takeover bid offers. QXO initially offered to purchase Beacon for $124.25 per share on January 15th (14% premium over the prior day’s close).
United Airlines Holdings, Inc. (UAL) moved lower throughout the week despite announcing strong earnings that beat on both the top and bottom line. The company delivered revenue of $14.7B versus $14.4B expected and adjusted EPS of $3.26 vs. $3.05. United is guiding between $11.50 - $13.50 in adjusted FY25 EPS (+18% y/y at the midpoint). TD Cowen raised their price target from $142 to $165 (57% upside) and reiterated the company as their favorite name in airlines.
Exhibit 3: Significant2 Detractors from Opportunity Equity Representative Account Performance, 1/17/25 - 1/24/25
Name | Type | Net Return |
Expedia Group, Inc. | Equity | -8.6% |
Norwegian Cruise Line Holdings Ltd. | Equity | -5.5% |
Kosmos Energy Ltd. | Equity | -4.5% |
QXO, Inc. | Equity | -1.9% |
United Airlines Holdings, Inc. | Equity | -2.2% |
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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