Last week, the Opportunity Equity strategy gained 12.36%, outperforming the S&P 500’s 7.36% gain (Exhibit 1). The strategy ended the week up 14.39% YTD, 406 basis points ahead of the S&P 500
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 11/6/201
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (10/30 - 11/6) | 12.36% | 7.36% |
| MTD | 12.36% | 7.36% |
| QTD | 11.87% | 4.50% |
| YTD | 14.39% | 10.33% |
| Inception (annualized since 6/26/00) | 7.86% | 6.48% |
Source: Bloomberg, Miller Value Partners
Farfetch Ltd. (FTCH) gained on the announcement of a landmark global partnership with Alibaba and Richemont. The company will receive $1.15B with $600m through the purchase of convertible notes by Alibaba and Richemont along with another $500M investment in a newly formed Chinese JV that will house Farfetch’s Chinese marketplace giving Alibaba and Richemont a 12.5% ownership stake each. Artemis has agreed to invest an additional $50M in the company with the issuance of Class A shares. The deal gives FTCH access to Alibaba’s platform and its 757mm customers. Uber Technologies (UBER) surged through the 50-day moving average as they reported earnings and won Proposition 22, their ballot initiative that allows them to classify their drivers as independent contractors and not employees. The company reported adjusted net revenues of $2.81bn (2.82bn est.) along with -$625mm in EBTIDA (--$623mm est.), a $212 increase off 2Q20 results. The company reiterated their expectation that they will reach company level EBITDA profitability at some point in 2021, as their Eats business continues to see strong growth as the pandemic continues. Deutsche Bank increased their price target to $54 from $38 (upside of 20.4%), and Goldman Sachs increased their price target to $52 (upside of 15.9%) from $42. Amazon.com Inc. (AMZN) rose above its 50 and 100-day moving averages. China Renaissance upgrade the stock from hold to buy and Citi bumped up the price target to $3,600 from $3,550 at Citi (upside of 8.7%) and Benchmark Securities raised its price target to $4,000 from $3,800 (upside of 20.8%). Facebook Inc. (FB) popped above the 50-day moving average.
Exhibit 2: Significant Contributors to Performance, 10/30/20 - 11/6/20
| Name | Type | Return |
| Farfetch Ltd. | Equity | 51.0% |
| Uber C32 Jan 2022 | Derivative | 92.5% |
| Uber Technologies Inc | Equity | 32.8% |
| Amazon.com Inc. | Equity | 9.1% |
| Facebook Inc. | Equity | 11.5% |
Source: Miller Value Partners
Quotient Technology. (QUOT) fell below the 50, 100, and 200-day moving averages after earnings disappointed. Revenue of $121.1mm was below consensus expectations of $124mm, while EBITDA was just above estimates coming in at $18.7mm vs. $18.3mm. The company reduced full year guidance with 4Q revenue of $115-125M vs expectations for $131.8m and adjusted EBITDA of $10-15M vs consensus of $20.3M. RBC decreased their price target to $9 from $10 (upside of 21.3%) Flexion Therapeutics. (FLXN) fell below its 50-day moving average. The company released full 3Q results after having pre-announced 3Q results a month earlier. The company filed a shelf for sale of up to $100m in stock vs their current market cap of $600M. Alibaba Group Holding Ltd. (BABA) fell on the week after Ant Financial suspended their IPO. The company reported quarterly results, which were largely in-line with street estimates. With revenue up 1.55Bn RMB (154bn RMB est.)(+30% y/y) and EBITDA of 47.5 RMB (46.2bn RMB est.) (28% y/y). RBC raised their price target to $335 from $300 (upside of 11.2%) and Raymond James cut their price target to $330 from $335 (upside of 10.0%). DXC Technology Company (DXC) fell below the 100-day moving average despite reporting earnings for their 2Q 2021 that beat estimates. Revenue of $4.55bn was above estimates of $4.46bn (-6% y/y), while EBITDA also beat expectations of $559.8mm coming in at $812mm. The company announced plans to keep their Workplace and Mobility business along with their Horizontal BPS business as they see greater potential value in keeping an optimizing the assets versus accepting the bids they have recieved. Morgan Stanley cut their price target to $31 from $33 (upside of 71.2%). GTY Technology Holding Inc. (GTYH) fell below the 50-day moving average as they reported quarterly results that beat on the top line while EPS missed. Revenues came in at $12.7mm against expectations of $11.6mm with adjusted EPS of -$0.15 against estimates of -$0.05. The company did make it to cash flow positive which was a milestone for GTY.
Exhibit 3: Significant Detractors from Performance, 10/30/20 - 11/6/20
| Name | Type | Return |
| Quotient Technology. | Equity | -16.7% |
| Flexion Therapeutics | Equity | -9.1% |
| Alibaba Group Holding Ltd. ADS | Equity | -1.6% |
| DXC Technology Company | Equity | -1.3% |
| GTY Technology Holding Inc. | Equity | -14.8% |
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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