Last week, the Opportunity Equity strategy gained 3.81%, outperforming the S&P 500’s 0.85% rise (Exhibit 1). The strategy ended the week up 7.43% YTD, or 136 basis points ahead of the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Versus Equity Indices, Through 3/31/171
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (3/24 - 3/31) | 3.81% | 0.85% |
| MTD | -2.03% | 0.12% |
| QTD | 7.43% | 6.07% |
| YTD | 7.43% | 6.07% |
| Inception (annualized since 12/30/99) | 6.40% | 4.82% |
Source: Bloomberg, Miller Value Partners
RH (RH) reported fourth quarter earnings and provided guidance for 2017. Fourth quarter sales and EPS were in-line with pre-announced results (Sales of $590M and EPS of $0.68) and the company guided for FY17 revenue growth of 8-12% ($2.3B-$2.4B) and adjusted EPS of $1.78-$2.19. The company reiterated that they expect to be FCF positive in 2017. Apple Inc. (AAPL) set a new high last week hitting $144.12 on Wednesday. Amazon.com Inc. (AMZN) bought Souq.com for an estimated ~$700M last week. Barclays placed a new buy rating on AMZN with a price target of $1,120, upside of 26% from Friday’s close and Stifel increased its price target to $1,025 from $912. There was minimal news on the other top contributors.
Exhibit 2: Significant Contributors to Performance, 3/24/17 - 3/31/17
| Name | Type | Return |
| RH | Equity | 25.3% |
| Apple Inc. C100 1/18 | Derivative | 7.0% |
| Endo Pharmaceuticals Holdings Inc. | Equity | 11.9% |
| Amazon.com Inc. | Equity | 4.8% |
| Platform Specialty Products Corp. | Equity | 3.8% |
Source: Miller Value Partners
Twitter Inc. (TWTR) was rated underweight by Barclays last week with a price target of $14, downside of 6%. There was minimal news on the other top detractors.
Exhibit 3: Significant Detractors from Performance, 3/24/17 - 3/31/17
| Name | Type | Return |
| Quotient Technology Inc. | Equity | -5.0% |
| Twitter Inc. | Equity | -1.3% |
| Endurance International Group Holdings | Equity | -0.6% |
| Pandora Media Inc. | Equity | -0.3% |
| Pangaea One L.P. | Private | -0.8% |
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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