Last week, the Opportunity Equity strategy gained 0.23%, underperforming the S&P 500’s 1.66% return. (Exhibit 1). The strategy ended the week up 8.96% YTD, 1,343 basis points behind the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 10/22/211
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (10/15 - 10/22) | 0.23% | 1.66% |
| MTD | 4.34% | 5.58% |
| QTD | 4.34% | 5.58% |
| YTD | 8.96% | 22.39% |
| Inception (annualized since 6/26/00) | 8.92% | 7.55% |
Source: Bloomberg, Miller Value Partners
Farfetch Ltd (FTCH) crossed its 50-day moving average after an article was published over the weekend speculating that Richemont is exploring strategic options for its Yoox Net-a-Porter business, including a potential agreement with Farfetch. Herbalife Nutrition Ltd (HLF) crossed above the 50-day moving average on limited news. Canada Goose Holdings (GOOS) crossed above its 50 and 100-day moving averages. The company announced the pre-sale for its first footwear collection, which is currently only available to its Canada Goose Basecamp members. Alibaba Group Holdings Ltd. (BABA) gained over the week following its Apsara Conference where the company highlighted their deepening cloud ecosystem with a one-stop solution. The company continues to highlight the opportunity to provide a cloud ecosystem to facilitate digitization to the public cloud. Teva Pharmaceuticals (TEVA) rose above the 100-day moving average on limited news.
Exhibit 2: Significant Contributors to Performance, 10/8/21 - 10/15/21
| Name | Type | Return |
| Herbalife Nutrition Ltd | Equity | 8.7% |
| Alibaba Group Holding Ltd. ADS | Equity | 5.8% |
| Teva Pharmaceutical-SP ADR | Equity | 4.7% |
| Farfetch Ltd | Equity | 5.8% |
| Canada Goose Holdings | Equity | 5.0% |
Source: Miller Value Partners
One Main Holdings Inc (OMF) fell below the 50, 100, and 200-day moving average after reporting 3Q results which beat but leaving full year guidance unchanged. The company reported EPS of $2.37 (9% YoY) ahead of consensus of $2.30. Originations came in at $3.9B ahead of estimates of $3.6B, rising 34% YoY driven by a normalization of demand along with product and channel optimization initiatives. Credit performance remained strong with net-charge-offs (NCO) of 3.5% down 167bps YoY but delinquencies rose +33bps YoY. The company reiterated their 2021 strategic priorities of a stable yield, interest expense of 5-5.2%, operating expense growth of 5-7%, NCOs of 4.2%, managed receivables growth of 8-10% and growth and tech investments of $100M. Alphabet Inc (GOOGL) crossed below its 50-day moving average moving in sympathy with Snapchat (SNAP) that reported worse than expected earnings and guidance due to Apple’s iOS privacy changes. Norwegian Cruise Line Holdings Ltd. (NCLH) fell below the 50-day moving average. There was minimal news on Uber (UBER) and Vroom, Inc. (VRM).
Exhibit 3: Significant Detractors from Performance, 10/15/21 - 10/22/21
| Name | Type | Return |
| OneMain Holdings Inc | Equity | -9.2% |
| UBER C32 1/22 | Derivative | -17.6% |
| Norwegian Cruise Line Holdings Ltd. | Equity | -4.0% |
| Vroom, Inc. | Equity | -8.1% |
| Alphabet Inc | Equity | -2.7% |
-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.
©2021 Miller Value Partners, LLC
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