Last week, the Opportunity Equity lost 0.51%, underperforming the S&P 500’s 0.30% rise (Exhibit 1). The strategy ended the week up 2.62% YTD, or 1056 basis points behind the S&P 500.
Exhibit 1: Preliminary Performance of LMM Opportunity Equity Strategy Versus Equity Indices, Through 12/23/161
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (12/16 - 12/23) | -0.51% | 0.30% |
| MTD | 3.18% | 3.08% |
| QTD | 3.72% | 4.95% |
| YTD | 2.62% | 13.18% |
| Inception (annualized since 12/30/99) | 6.16% | 4.60% |
Source: Bloomberg, LMM
JPMorgan Chase & Co. Warrants (JPM/WS) were a top contributor despite being fined $33M for operating a cartel with RBS to influence the Swiss franc Libor benchmark. American Airlines Group Inc. (AAL) ended the week up after winning $5M in an antitrust lawsuit against Sabre (SABR). There was minimal news on the other top contributors.
Exhibit 2: Significant Contributors to Performance, 12/16/16 - 12/23/16
| Name | Type | Return |
| JPMorgan Chase & Co - Warrants | Warrants | 4.8% |
| Genworth Financial Inc. | Equity | 4.1% |
| Endurance International Group Holdings | Equity | 3.2% |
| American Airlines Group Inc. | Equity | 1.8% |
| MGIC Investment Corp | Equity | 2.0% |
Source: LMM LLC.
Intrexon Corp. (XON) declined last week following OvaScience’s announcement that the CEO & COO would step down and the company would reduce its workforce by 30%. Intrexon has an exclusive channel collaboration with OvaScience. Quotient Technology Inc. (QUOT) was down as Dawn Lepore, director, sold 3k shares during the week. Both Twitter Inc. (TWTR) and the Twitter Call Options were down following the departure of Adam Messinger as CTO and the announcement that TWTR had inflated video ad views due to a technical error. There was minimal news on Ziopharm Oncology, Inc. (ZIOP).
Exhibit 3: Significant Detractors from Performance, 12/16/16 - 12/23/16
| Name | Type | Return |
| Intrexon Corp | Equity | -8.9% |
| Quotient Technology Inc. | Equity | -7.1% |
| Twitter Inc | Equity | -11.4% |
| Ziopharm Oncology Inc. | Equity | -8.0% |
| Twitter Inc C18 1/18 | Options | -29.5% |
Source: LMM LLC.
1The performance figures reflect the deduction of a model investment management fee of 1% (the highest fee for separate accounts under our fee schedule) and certain other expenses. For important additional information about Opportunity Equity performance, please click on the Opportunity Equity Composite Performance Disclosure. The performance returns shown in this report are preliminary and are subject to revision. Past performance is no guarantee of future results.
Significant Contributors and Significant Detractors are the Strategy holdings that had the greatest effect on Strategy performance for the week. Holdings that have been in the Strategy since the end of the most recent calendar quarter are identified by name. 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 LMM.
Any views expressed are subject to change at any time, and LMM disclaims any responsibility to update such views. 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.
©2016 LMM LLC. LMM LLC is owned by Bill Miller and Legg Mason, Inc.
Share