Opportunity Equity Weekly Update for 1/31/2025 – 2/7/2025

Expedia Rises on Strong Earnings while Alphabet Falls on CAPEX Guide

Last week, the Opportunity Equity Strategy’s representative account fell -0.63%, underperforming the S&P 500’s -0.23% loss. (Exhibit 1). The strategy ended the week up 4.15% YTD, 160 basis points ahead of the S&P 500.

Exhibit 1: Performance of Opportunity Equity Representative Account Net of Fees, Versus S&P 500, Through 2/7/25¹

Time Period	Opportunity Equity Representative Account	S&P 500
Last Week (1/31 - 2/7)	-0.63%	-0.23%
MTD	-0.63%	-0.23%
QTD	4.15%	2.55%
YTD	4.15%	2.55%
1 Year	32.05%	22.30%
5 Year	9.61%	14.39%
10 Year	9.30%	13.39%
Inception (annualized since 6/26/00)	7.89%	7.95%

Expedia Group, Inc. (EXPE) rose through the 50-day moving average and reached a new 52-week high after announcing earnings that beat on the top and bottom line. The beat was driven by better-than-expected travel demand in 4Q24. Bookings growth improved q/q in all three of the company’s core brands: Expedia, Hotels.com, and Vrbo. The company generated revenue of $3.2B vs. $3.1B expected and EPS of $2.20 vs. $1.31 expected. Additionally, they repurchased 12.1M shares in FY24 (10% shares outstanding) and have $3.2B left on their program (12% current market cap). Bank of America increased their price target from $221 to $250 (24% upside).

Mattel, Inc. (MAT) jumped through the 50-day, 100-day, and 200-day moving averages after reporting strong earnings. The company delivered revenue of $1.65B vs. $1.63B expected and adjusted EPS of $0.35 vs. $0.20 expected. Mattel laid out FY25 adjusted EPS guidance of $1.66-$1.72 vs. $1.57 expected. The company retired $400M in shares during FY24 (6% current market cap) and are targeting $600M in FY25 (8% current market cap). DA Davidson increased their price target from $27 to $30 (40% upside).

Precigen, Inc. (PGEN) rose on limited news.

Nvidia Corp (NVDA) rose through the 200-day moving average. Evercore reiterated their $190 price target (46% upside). They expect Hyperscalers will continue to demand Nvidia’s premium chips and believe DeepSeek concerns are overblown. 

Exhibit 2: Significant² Contributors to Opportunity Equity Representative Account Performance, 1/31/25 - 2/7/25

Name	Type	Net Return
Expedia Group, Inc.	Equity	18.3%
Mattel, Inc.	Equity	15.2%
New Security*	Derivative	24.6%
Precigen, Inc.	Equity	25.9%
Nvidia Corp	Equity	8.1%

Alphabet Inc. (GOOGL) fell through the 50-day moving average on mixed earnings, delivering revenue of $81.6B vs. $83.2B and EPS of $2.15 vs. $2.13 expected. The company laid out FY25 CAPEX guidance of $75B (43% y/y). Morningstar increased their price target from $220 to $237 (28% upside). Morningstar expects cloud growth to inflect upwards as the company brings more capacity online. They are confident the company will maintain their wide moat and continue to monetize AI.

Illumina Inc. (ILMN) fell through the 200-day moving average despite reporting inline revenue of $1.1B and an EPS beat of $1.17 vs. $1.11 expected. The stock sold off on news that China placed Illumina on their unreliable entity list. Stifel increased their price target from $155.49 to $160.00 (44% upside). They are bullish on the company’s genomic analysis technologies and see significant long-term potential for growth and new product cycles. 

Seadrill Limited (SDRL) followed Brent’s -1.60% move lower.

Amazon.com, Inc. (AMZN) fell despite beating on the top and bottom line, printing revenue of $187.8B vs. $187.3B expected, EBIT of $21.2B vs. $18.8B expected, and EPS of $1.86 vs. $1.47 expected. AWS has been very accretive to the company’s operating margin. The segment grew sales 19% y/y and expanded its operating margins from 29.6% to 36.9% y/y. Amazon remains committed to improving their AI infrastructure and laid out FY25 CAPEX guidance of ~$100B (20% y/y). Canaccord increased their price target from $265 to $280 (22% upside).

Canada Goose Holdings Inc. (GOOS) fell through the 50-day and 100-day moving averages following an earnings miss. The company delivered revenue of C$608M vs. C$620M expected and EBIT of C$205M vs. C$217M expected. Management attributed the miss to a slower than expected October and November but said sales have picked up since the Haider Ackermann launch at the end of November. Barclays lowered their price target from $11 to $10 (4% upside) and maintained their “equalweight” rating.

Exhibit 3: Significant² Detractors from Opportunity Equity Representative Account Performance, 1/31/25 - 2/7/25

Name	Type	Net Return
Alphabet Inc.	Equity	-9.2%
Illumina, Inc.	Equity	-16.3%
Seadrill Limited	Equity	-9.1%
Amazon.com, Inc.	Equity	-3.6%
Canada Goose Holdings Inc.	Equity	-12.3%

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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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