Last week, the Opportunity Equity strategy gained 0.81%, outperforming the S&P 500’s -1.83% loss. (Exhibit 1). The strategy ended the week down 0.81% YTD, 263 basis points ahead of the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 1/7/221
|Time Period||Opportunity Equity||S&P 500|
|Last Week (12/31 - 1/7)||0.81%||-1.83%|
|Inception (annualized since 6/26/00)||8.28%||7.63%|
Source: Bloomberg, Miller Value Partners
Diamondback Energy (FANG) rose above its 50-day moving average as oil prices moved higher. Citi raised their price target on the name to $122 (upside of 0%), while Keybanc maintained its overweight rating and raised its price target to $125 from $120 (4% upside). Alibaba Group Holding Ltd. ADS (BABA) rose despite a number of price target reductions. Citi cut its Price Target from $234 to $216 (70% upside), while Morgan Stanley cut their price target to $165 from $180 (27% upside). Teva Pharmaceuticals (TEVA) rose above its 50 and 100-day moving average on limited news. Bank of America (BAC) rose above its 50-day moving average as Treasury yields climbed on expectations that the Federal Reserve will begin a cycle of interest-rate hikes this year.
Exhibit 2: Significant Contributors to Performance, 12/31/21 - 1/7/22
|Diamondback Energy Inc||Equity||12.7%|
|Teva Pharmaceutical-SP ADR||Equity||10.5%|
|Alibaba Group Holding Ltd. ADS||Equity||9.3%|
|Bank of America Corp||Equity||10.5%|
Source: Miller Value Partners
Taylor Morrison Home Corp (TMHC) fell through its 50-day moving average as interest rates moved higher. Janney Montgomery Scott raised its Price Target on the name to $39 from $37 (25% upside). RBC downgraded ADT Inc. (ADT) to sector perform and lowered their price target from $12 to $10 (upside of 27%) while Citi resumed coverage on the name with a Buy rating and price target of $10.25 (upside of 30%). Tivity Health Inc (TVTY) fell through its 50-day moving average despite being upgraded to “Neutral” at Credit Suisse with a $29 Price Target (16% upside). Alphabet Inc (GOOGL) fell below its 100-day moving average. There was limited news on Farfetch Ltd (FTCH).
Exhibit 3: Significant Detractors from Performance, 12/31/21 - 1/7/22
|Taylor Morrison Home Corp||Equity||-11.8%|
|Tivity Health Inc||Equity||-6.2%|
-Source: Miller Value Partners
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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.
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