Last week, the Opportunity Equity Strategy's representative account fell -3.00%, outperforming the S&P 500’s -3.31% decline. (Exhibit 1). The strategy ended the week down -32.18% YTD, 1,235 basis points behind the S&P 500.
Exhibit 1: Performance of Opportunity Equity Representative Account Net of Fees, Versus S&P 500, Through 11/4/221
| Time Period | Opportunity Equity Representative Account | S&P 500 |
| Last Week (10/28 - 11/4) | -3.00% | -3.31% |
| MTD | -2.23% | -2.59% |
| QTD | 8.01% | 5.30% |
| YTD | -32.18% | -19.83% |
| 1 Year | -39.61% | -18.16% |
| 5 Year | 3.41% | 9.75% |
| 10 Year | 11.08% | 12.47% |
| Inception (annualized since 6/26/00) | 6.06% | 6.37% |
Source: Bloomberg, Miller Value Partners. Visit the Strategy page for Opportunity Equity performance through the most current month end period.
Our energy investments climbed with Ovintiv Inc. (OVV) crossing above the 50-day moving average along with Diamondback Energy Inc (FANG) following oil prices higher over the course of the week.
Green Thumb Industries Inc. (GTBIF) rose above the 50-day moving average after strong quarterly earnings. The company reported revenue of $261M vs $255M expected with adjusted EBITDA of $84M ahead of consensus at $77M. The company highlighted it expects to launch adult recreational use in Rhode Island in December and Connecticut within the next six months. Cantor Fitzgerald raised its price target to $36 from $32 (194% upside).
Alibaba Group Holding Limited (BABA) hosted APSARA conference 2022 in Hangzhou. The company outlined the limited near-term impact of the chips act, its strategic emphasis on profitable long-term growth, and its emphasis on cloud technology providing key infrastructure to enable both the Metaverse and Internet of Things (IoT). Truist lowered its price target to $125 from $135 (79% upside)
Norwegian Cruise Line Holdings Ltd. (NCLH) named Zillah Byng-Thorne to its board of directors. At the annual CruiseWorld conference, CEO Frank Del Rio announced a new initiative to pay travel agents close to 40% more in commissions through its plan to pay on non-commissionable fees (NCFs) for advance bookings, which management believes will enable the company to reduce its marketing expenses.
Exhibit 2: Significant2 Contributors to Opportunity Equity Representative Account Performance, 10/28/22 - 11/4/22
| Name | Type | Return |
| Ovintiv Inc. | Equity | 6.5% |
| Green Thumb Industries Inc. | Equity | 9.4% |
| Alibaba Group Holding Limited | Equity | 9.5% |
| Diamondback Energy Inc | Equity | 4.9% |
| Norwegian Cruise Line Holdings Ltd. | Equity | 2.5% |
Source: Miller Value Partners. See below for additional information.
Amazon.com, Inc. (AMZN) announced it would pause incremental hiring in its corporate workforce, in addition to the hiring freeze announced in its advertising business earlier in the week.
Coinbase Global, Inc. (COIN) fell through the 50 and 100-day moving averages after announcing 3Q results. The company reported revenue of $590M below consensus of $649M with adjusted EBITDA coming in above consensus at -$116M vs -$213M expected and adjusted EPS of -$2.43 missing consensus of -$2.34. Despite the softer start to the year, Coinbase remains committed to investing for the long-term while managing costs to survive a digital asset downturn. BTIG lowered its price target to $110 from $220 (87% upside), while Wedbush lowered its price target to $75 from $100 (28% upside).
Mattel, Inc. (MAT) received an investment grade rating from Moody’s. The agency now rates the company unsecured bonds Baa3 (up from Ba1) with a stable outlook. The upgrade marks a shift if the company’s capital allocation framework allowing for enhanced flexibility for management to pursue accretive M&A growth opportunities and share repurchases.
Teva Pharmaceutical Industries Limited (TEVA) fell below the 50, 100, and 200-day moving averages. The company released 3Q results and formally announced it would replace CEO Kare Schultz after his contract expires next year. The company reported Q3 earnings, where revenue and EBITDA both came in behind consensus at $3.6B vs. $3.9B expected and $1.09B vs $1.17B expected. The company again lowered full year guidance to revenue of $14.8-15.4B on foreign exchange headwinds from $15.0-15.6B previously, with EBITDA, EPS and FCF remaining unchanged at $4.7-5.0B, $2.40-2.60 and $1.9-2.2B, respectively. The company announced it continues to expect to generate $2B in FCF on an annual basis going forward even after annual payments of $350M begin on its $4.2B opioid litigation settlement. UBS downgraded the name to sell from neutral on news of the company’s leadership transition.
There was limited news on Alphabet Inc. (GOOGL).
Exhibit 3: Significant2 Detractors from Opportunity Equity Representative Account Performance, 10/28/22 - 11/4/22
| Name | Type | Return |
| Amazon.com, Inc. | Equity | -12.0% |
| Alphabet Inc. | Equity | -10.1% |
| Coinbase Global, Inc. | Equity | -18.4% |
| Mattel, Inc. | Equity | -6.2% |
| Teva Pharmaceutical Industries Limited | Equity | -4.9% |
Source: Miller Value Partners. See below for additional information.
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As of prior week's market close unless otherwise stated.
1The performance figures for the representative Opportunity Equity account reflect the deduction investment management fees and certain other expenses. Returns greater than 1 year are annualized.
For additional information about Opportunity Equity Strategy performance, please click on the Opportunity Equity Strategy Composite Performance Disclosure. Past performance is no guarantee of future results.
2Significant Contributors and Detractors are based on holdings that had the greatest effect on representative account performance for the week. Holdings that have been in the portfolio since the end of the most recent calendar quarter are identified by name. Returns listed above represent the market performance of the individual security during the week, or for the partial period held in the portfolio during the week. 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. There is no guarantee that market trends discussed herein will continue. 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. References to specific securities are for illustrative purposes only. Portfolio composition is shown as of a point in time and is subject to change without notice. Content may not be reprinted, republished or used in any manner without written consent from Miller Value Partners.
©2022 Miller Value Partners, LLC
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