Opportunity Equity Weekly Update for 2/21/2025 – 2/28/2025

General Motors Rises on Dividend Increase while Seadrill Falls on Earnings Miss

Last week, the Opportunity Equity Strategy’s representative account fell -3.31%, underperforming the S&P 500’s -0.95% loss. (Exhibit 1). The strategy ended the week up 0.64% YTD, -80 basis points behind the S&P 500.

Exhibit 1: Performance of Opportunity Equity Representative Account Net of Fees, Versus S&P 500, Through 2/28/25¹

Time Period	Opportunity Equity Representative Account	S&P 500
Last Week (2/21 - 2/28)	-3.31%	-0.95%
MTD	-3.98%	-1.30%
QTD	0.64%	1.44%
YTD	0.64%	1.44%
1 Year	20.95%	18.41%
5 Year	12.25%	16.85%
10 Year	8.40%	12.98%
Inception (annualized since 6/26/00)	7.72%	7.88%

General Motors Co (GM) rose through the 200-day moving average after announcing a +25% boost to the quarterly dividend and a new $6B share buyback authorization (12% of the current market cap). Morningstar increased their price target from $80 to $81 (65% upside).

CVS Health Corp (CVS) and QXO, Inc. (QXO) rose on limited news.

UBS Group AG (UBS) rose on news that the Swiss Finance Ministry is now favoring the use of their legislative system to decide whether or not to increase foreign capital requirements. Consensus believes this could potentially push the decision 2-3 years.

Exhibit 2: Significant² Contributors to Opportunity Equity Representative Account Performance, 2/21/25 - 2/28/25

Name	Type	Net Return
General Motors Co	Equity	6.1%
New Security*	Derivative	17.2%
CVS Health Corp	Equity	3.5%
QXO, Inc.	Equity	1.8%
UBS Group AG	Equity	2.4%

Alibaba Group Holding Ltd (BABA) announced their plan to release a new reasoning model within Qwen Chat, the company’s interface for AI Models. Morgan Stanley increased their price target from $100 to $180 (36% upside).

Seadrill Limited (SDRL) fell to a new 52-week low after announcing a slight earnings miss. The company delivered revenue of $289M vs $296M expected and EBITDA of $28M vs. $33.5M expected. Seadrill has been aggressively repurchasing shares at these prices. The company bought back $100M shares in 4Q24 (7% of the current market cap) and $527M in FY24 (35% of the current market cap). Stifel lowered their price target from $65 to $46 (81% upside) and maintained their buy rating. Stifel believes the company should trade at 9x EBITDA and expects they can generate EBITDA of $353M in FY25 and $657M in FY26, implying significant upside from the current market cap of ~$1,520M.

Kosmos Energy Ltd. (KOS) reached a new 52-week low after announcing earnings that missed on the top and bottom line. The company delivered revenue of $397M vs. $402M expected and EBIT of $84M vs. $90M expected. Stifel maintained their $7 price target (149% upside) and Bank of America maintained their $6 price target (114% upside). Bank of America believes the company is poised for a significant free cash flow inflection after two years of expanding their balance sheet. 

Nvidia Corp (NVDA) fell through the 50-day, 100-day, and 200-day moving averages despite announcing earnings that beat on the top and bottom line. The company delivered revenue of $39.3B (78% y/y) vs. $38.2B expected and EPS of $0.89 (82% y/y) vs. $0.80 expected. The company is guiding for revenue between $42.14B - $43.86B next quarter, (9% q/q) at the midpoint. Bank of America increased their price target from $190 to $200 (60% upside) and reiterated the company as their top AI stock pick. They believe the stock looks compelling at 30% for the next two years.

Exhibit 3: Significant² Detractors from Opportunity Equity Representative Account Performance, 2/21/2025 – 2/28/2025

Name	Type	Net Return
Alibaba Group Holding Ltd	Equity	-8.0%
Seadrill Limited	Equity	-14.2%
New Security*	Equity	-29.4%
Kosmos Energy Ltd.	Equity	-11.6%
Nvidia Corp	Equity	-7.1%

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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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