Last week, the Opportunity Equity strategy lost 2.93%, underperforming the S&P 500’s -1.01% decline (Exhibit 1). The strategy ended the week up 1.05% YTD, or 105 basis points behind the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 1/24/201
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (1/17 - 1/24) | -2.93% | -1.01% |
| MTD | 1.05% | 2.10% |
| QTD | 1.05% | 2.10% |
| YTD | 1.05% | 2.10% |
| Inception (annualized since 6/26/00) | 7.50% | 6.33% |
Source: Bloomberg, Miller Value Partners
Lennar Corp. (LEN) gained as December total existing home sales rose 3.6% sequentially to 5.54M beating expectations for 5.43M with single-family existing home sales rising 2.7% sequentially to 4.92M. Flexion Therapeutics (FLXN) gained as BTIG published a positive note on the company detailing the potential growth of Zilretta was discussing the company’s undervalued pipeline. BTIG has a $27 price target, upside of 53% upside. Micron Technology Inc. (MU) gained as DRAM spot prices continued to rally, increasing 22% since the trough on December 5th which is bullish for 2020 results. There was minimal news on Eventbrite Inc. (EB) and NXP Semiconductors (NXPI).
Exhibit 2: Significant Contributors to Performance, 1/17/20 - 1/24/20
| Name | Type | Return |
| Lennar Corp. | Equity | 5.8% |
| Eventbrite Inc. | Equity | 8.1% |
| NXP Semiconductors | Equity | 1.1% |
| Flexion Therapeutics | Equity | 0.4% |
| Micron Technology Inc. | Equity | 0.2% |
Source: Miller Value Partners
Medifast Inc. (MED) crossed below the 200-day moving average while Stitch Fix Inc. (SFIX) fell below the 50, 100, 200-day moving average. Bausch Health Companies Inc. (BHC) fell below the 50-day despite Wells Fargo moving from a sell to an equal weight recommendation with a price target of $32, upside of 13%. KeyBanc Capital raised their price target for Alibaba Group Holdings (BABA) to $260 from $243, upside of 22% while the company declined on the news of the spread of the coronavirus. Cantor lowered their price target for Tivity Health Inc. (TVTY) to $40 from $45, upside of 65%. Tivity formally announced that it is now offering its Prime Fitness program to Walmart’s 1.5m associates.
Exhibit 3: Significant Detractors from Performance, 1/17/19 - 1/24/20
| Name | Type | Return |
| Medifast, Inc. | Equity | -10.5% |
| Stitch Fix, Inc. | Equity | -10.2% |
| Bausch Health Companies Inc. | Equity | -6.1% |
| Alibaba Group Holdings | Equity | -6.0% |
| Tivity Health Inc. | Equity | -5.0% |
Source: Miller Value Partners
1The performance figures reflect the results of a representative account net of management fee 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. Content may not be reprinted, republished or used in any manner without written consent from Miller Value Partners.
©2019 Miller Value Partners, LLC
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