Last week, the Opportunity Equity strategy was down 7.85%, underperforming the S&P 500’s 5.62% decline (Exhibit 1). The strategy ended the week up 1.81% YTD, 96 basis points behind the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 10/30/201
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (10/23 - 10/30) | -7.85% | -5.62% |
| MTD | -0.44% | -2.66% |
| QTD | -0.44% | -2.66% |
| YTD | 1.81% | 2.77% |
| Inception (annualized since 6/26/00) | 7.25% | 6.11% |
Source: Bloomberg, Miller Value Partners
Purtech Health PLC (PRTC) gained on the announcement that it filed publically for a potential Nasdaq listing of American Depository Shares. Following the US listing, the ADSs will trade on the Nasdaq while the company’s shares will continue to trade on the London Stock Exchange. In addition, the company published some positive data on their founded entity, Akili, showing 2/3rds of parents reporting real-world improvement in child’s ADHD-related impairments following two months of treatment of Akili’s ADHD product. Genworth Financial Inc. (GNW) gained on a Dealreporter story that China Oceanwide is confident that they will close their acquisition in November. Brookfield also agreed to pay Genworth $1.2bn for the rest of their Canadian unit. Quotient Technology (QUOT) was up slightly on the launch of their new National Rebates platform, with the goal of driving promotion volume through a fully integrated digital platform. GTY Govtech Inc. (GTYH) fell on limited news.
Exhibit 2: Significant Contributors to Performance, 10/23/20 - 10/30/20
| Name | Type | Return |
| Puretech Health PLC | Equity | 3.7% |
| Genworth Financial Inc | Equity | 3.6% |
| Quotient Technology. | Equity | 0.5% |
| Cash | Equity | 0.0% |
| GTY Govtech Inc. - Warrant | Derivative | -14.8% |
Source: Miller Value Partners
Taylor Morrison Home Corp. (TMHC) crossed below the 100-day moving average despite releasing third quarter earnings that beat on both the top and bottom line. Sales came in at $1.64Bn ahead of expectations of $1.44bn. Operating profit also beat coming in at $162.5mm against expectations for $101.1mm leading to adjusted EPS of $0.90 against expectations for just $0.62. The company updated 4Q guidance expecting deliveries of 3,050 against street estimates of 3,425 (largely due to a pull forward into 3Q), gross margins of 18% vs 17.3% and average community count of 375-380 vs. 409. Zelman Research downgraded the name from a Buy to Hold along with six other names in the space. Uber Technologies. (UBER) fell below the 50-day moving average as concerns grew over the passing of Prop 22 on the ballet for November 3rd. Drivers launched a legal challenge around Uber’s policy of firing drivers based on their ratings, arguing that minority drivers are disproportionately fired due to biases in customers’ ratings. The company also announced that they will begin delivering groceries in New York City, as they dip their toe into the American grocery delivery market. ADT Inc. (ADT) fell despite Citi upgrading the stock to a Buy rating while slightly lowering their price target from $13.50 to $10 (upside of 51.8%). Citi cited the PE overhang from Apollo’s ownership of stock capping the upside potential. Canada Goose Holdings (GOOS) was initiated with a buy rating at Berenberg and price target of $43 (upside of 37.8%). Goldman published a reporting noting a lack of tourism being a risk to sales. Farfetch (FTCH) fell in concert with the market on limited news.
Exhibit 3: Significant Detractors from Performance, 10/23/20 - 10/30/20
| Name | Type | Return |
| Taylor Morrison Home Corp. | Equity | -14.5% |
| Farfetch Ltd. | Equity | -6.2% |
| Uber C32 Jan 2022 | Derivative | -19.9% |
| ADT Inc. | Equity | -11.8% |
| Canada Goose Holdings | Equity | -12.2% |
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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