Last week, the Opportunity Equity strategy rose 3.04%, outperforming the S&P 500’s 1.23% gain (Exhibit 1). The strategy ended the week up 20.05% YTD, or 249 basis points behind the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 10/25/191
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (10/18 - 10/25) | 3.04% | 1.23% |
| MTD | 6.23% | 1.64% |
| QTD | 6.23% | 1.64% |
| YTD | 20.05% | 22.54% |
| Inception (annualized since 6/26/00) | 6.92% | 5.91% |
Source: Bloomberg, Miller Value Partners
American Airlines Group Inc. (AAL) crossed above the 100-day moving average after reporting 3Q results which beat EPS estimates despite the company lowering their full year outlook. The company reported 3Q EPS of $1.42 ahead of consensus of $1.40. Total revenue came in at $11.91B slightly below consensus of $11.93B with the company’s profit being negatively impacted by $140M due to the continued grounding of the 737 Max. American pulled the 737 Max from its schedules through January 2020 and lowered their full year 2019 EPS guidance to $4.50-5.50 from $4.50-6.00. Micron Technology Inc. (MU) crossed above the 50-day moving average. The company held their annual Insight Conference where the company showcased their new 3D Xpoint technology, an AI development platform, a silicon-based security as a service platform, and announced the acquisition of FWDNXT, a software and hardware startup. Bernstein’s analyst published a report stating that he sees signs of bottoming and recovery starting in 2020 for both DRAM and NAND. Medifast Inc. (MED) crossed above the 50-day moving average. There was minimal news on Ziopharm Oncology Inc. (ZIOP) and Flexion Therapeutics (FLXN).
Exhibit 2: Significant Contributors to Performance, 10/18/19 - 10/25/19
| Name | Type | Return |
| American Airlines Group Inc. | Equity | 9.3% |
| Micron Technology Inc. | Equity | 10.5% |
| Medifast Inc. | Equity | 8.2% |
| Flexion Therapeutics | Equity | 7.8% |
| Ziopharm Oncology Inc. | Equity | 8.0% |
Source: Miller Value Partners
Endo International (ENDP) declined slightly as there has been no additional progress made on the potential global opioid settlement. Peloton Interactive Inc. (PTON) declined over the week as multiple companies initiated on the name with the company receiving 19 buy ratings with an average price target of $31, upside of 40%, and two hold ratings. Genworth Financial Inc. (GNW) declined over the week after receiving feedback from Canadian regulators regarding the sales of Genworth MI Canada to Brookfield Business Partners. The regulators continue to focus on national security matters, including data protection and safeguarding customers’ information. Genworth has received all the required approvals to complete the sale and they continue to target a closing by the end of 2019. There was minimal news on Tivity Health Inc. (TVTY) and NXP Semiconductors (NXPI).
Exhibit 3: Significant Detractors from Performance, 10/18/19 - 10/25/19
| Name | Type | Return |
| Endo International | Equity | -7.7% |
| Tivity Health Inc. | Equity | -5.5% |
| NXP Semiconductors | Equity | -2.9% |
| Peloton Interactive Inc. | Equity | -4.7% |
| Genworth Financial Inc. | Equity | -1.4% |
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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