Last week, the Opportunity Equity strategy lost 3.58%, underperforming the S&P 500’s 1.42% decline (Exhibit 1). The strategy ended the week up 3.49% YTD, or 171 basis points behind the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Versus Equity Indices, Through 3/24/171
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (3/17 - 3/24) | -3.58% | -1.42% |
| MTD | -5.63% | -0.70% |
| QTD | 3.49% | 5.20% |
| YTD | 3.49% | 5.20% |
| Inception (annualized since 12/30/99) | 6.17% | 4.78% |
Source: Bloomberg, Miller Value Partners
Apple Inc. (AAPL) had a busy week unveiling the iPhone 7 Red Special Edition, the new iPad and announcing the acquisition of productivity app maker Workflow for an undisclosed amount. Cowen raised the price target for AAPL to $155 from $135, upside of 10% from Friday’s close while Needham lowered the stock to buy from strong buy while increasing the price target to $165, upside of 17%. United Continental Holdings (UAL) benefited from the price of oil dropping over the week. Pangaea One benefited from a distribution related to sale proceeds. There was minimal news on the other top contributors.
Exhibit 2: Significant Contributors to Performance, 3/17/17 - 3/24/17
| Name | Type | Return |
| Pandora Media Inc. | Equity | 3.2% |
| RH | Equity | 1.8% |
| Apple Inc. C100 1/18 | Derivative | 1.6% |
| United Continental Holdings | Equity | 1.7% |
| Pangaea One LP | Private | 0.7% |
Source: Miller Value Partners
Quotient Technology Inc. (QUOT) fell below the 50-day moving average. OneMain Holdings Inc. (OMF) fell below the 50-day and 200-day moving average after releasing January Trust Performance which showed average net loss rates up 12bps MoM and 76bps YoY. Deutsche Bank raised its price target for OMF to $34, upside of 38% from Friday’s close. Intrexon Corp. (XON) fell over the week as Todd Campbell at Fox Business wrote that it was overvalued. Gamestop Corp. (GME) fell after announcing fourth quarter results and providing 2017 guidance. Fourth quarter EPS of $2.38 came in above consensus of $2.29 with better than expected gross margins (+350bps YoY). Guidance for 2017 disappointed with EPS guidance of $3.10 - $3.40, 13% below street estimates. JPMorgan Chase & Co (JPM/WS) fell below the 50-day moving average. JPMorgan increased its quarterly dividend to $0.50 from $0.48.
Exhibit 3: Significant Detractors from Performance, 3/17/17 - 3/24/17
| Name | Type | Return |
| Quotient Technology Inc. | Equity | -11.1% |
| OneMain Holdings Inc, | Equity | -6.9% |
| Intrexon Corp. | Equity | -8.8% |
| GameStop Corp. | Equity | -16.0% |
| JPMorgan Chase & Co. - Warrants | Derivatives | -7.1% |
Source: Miller Value Partners
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 us.
Any views expressed are subject to change at any time, and Miller Value Partners 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.
©2017 Miller Value Partners
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