Last week, the Opportunity Equity strategy gained 1.36%, outperforming the S&P 500’s -0.27% return. (Exhibit 1). The strategy ended the week up 12.44% YTD, 1,377 basis points behind the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 11/12/211
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (11/5 - 11/12) | 1.36% | -0.27% |
| MTD | 5.47% | 1.75% |
| QTD | 7.66% | 8.88% |
| YTD | 12.44% | 26.21% |
| Inception (annualized since 6/26/00) | 9.05% | 7.68% |
Source: Bloomberg, Miller Value Partners
Green Thumb Industries Inc. (GTBIF) crossed its 50 -day moving averages after strong quarterly earnings. The company reported revenue of $234M vs $233M expected with adjusted EBITDA of $81M slightly behind consensus of $83M, leading to EPS of $0.09 just behind consensus of $0.10. The company highlighted its elevated CapEx level focused on building out capacity that should be operational by mid-year 2022. Cannabis stock also benefited from the news of a Republican-led legalization bill. Farfetch (FTCH) crossed above its 50, and 100-day moving averages after announcing that the company is in advanced talks with Richemont to enhance their existing partnership with Richemont’s YOOX Net-a-Porter Group. JD (JD) crossed above its 50 and 200-day moving averages on strong Singles Day results with the company reporting GMV of Rmb349.1bn (+28.6% YoY). The RealReal (REAL) rose above its 100-day moving averages after the company reported earnings that exceeded expectations. GMV came in a $368M vs. $367M expected with revenue of $118.8M beating consensus of $113.7M. EBITDA came in at -$31.5M better than the -$37.0M expected. The company continued to show strong growth in active clients which grew 25% year-over-year. General Motors Co (GM) rose on after the Senate passed the $1T infrastructure bill that includes a $7.5B investment to build out EV charging stations.
Exhibit 2: Significant Contributors to Performance, 11/5/21 - 11/12/21
| Name | Type | Return |
| Green Thumb Industries Inc. | Equity | 28.7% |
| Farfetch Ltd | Equity | 24.1% |
| JD 1/24 C75 | Derivative | 23.3% |
| The RealReal, Inc. | Equity | 21.1% |
| General Motors Co | Equity | 8.3% |
Source: Miller Value Partners
Norwegian Cruise Line Holdings Ltd. (NCLH) fell through its 50, 100, and 200-day moving average. The company was hit after the International Maritime Organization (IMO) proposed a fee on ship owners of $100 per metric ton of carbon dioxide emissions. Based on 2019 emissions, this would be equal to 20% of NCLH’s EBIT in 2019. The decision is not final and could take up to 2-years before countries decide to adopt the decision. Precigen Inc. (PGEN) declined following its announcement of 3Q earnings. The company reported revenues of $21.6M behind consensus of $23.9M with net loss per share of $0.15 matching expectations. The company ended the quarter with $181M of cash on hand. Uber (Uber) declined as the Department of Justice sued the company for overcharging customers with disabilities. Karuna Therapeutics (KRTX) announced an exclusive licensing agreement with Zai Lab (ZLAB) for the development, manufacturing, and commercialization of KarXT in Greater China for $35M upfront with the potential for another $80M in development and regulatory milestones and another $72M in sales-related milestones. Once commercialized, KRTX will be eligible to receive low double-digit to high-teens tiered royalties based on net sales of KarXT in Greater China. Karuna declined after it was reported the Puretech, which spunoff Karuna and was the co-inventor of their lead program, sold 750,000 shares (1/3 of the holdings). Puretech continues to monetize their ownership in the founded entities as they focus on their internally development programs. Bausch Health Companies Inc. (BHC) fell on limited news.
Exhibit 3: Significant Detractors from Performance, 11/5/21 - 11/12/21
| Name | Type | Return |
| Norwegian Cruise Line Holdings Ltd. | Equity | -11.4% |
| Precigen Inc. | Equity | -15.3% |
| Uber C32 1/22 | Derivative | -13.3% |
| Bausch Health Companies Inc | Equity | -5.5% |
| Karuna Therapeutics Inc | Equity | -11.3% |
-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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