Last week, the Opportunity Equity strategy declined -3.06%, outperforming the S&P 500’s -3.77% fall (Exhibit 1). The strategy ended the week up 7.53% YTD, or 734 basis points ahead of the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 11/23/181
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (11/16 - 11/23) | -3.06% | -3.77% |
| MTD | -1.07% | -2.74% |
| QTD | -12.75% | -9.39% |
| YTD | 7.53% | 0.19% |
| Inception (annualized since 6/26/00) | 7.22% | 5.32% |
Source: Bloomberg, Miller Value Partners
United Continental Holdings (UAL) and Delta Airlines Group Inc. (DAL) gained over the week as Credit Suisse initiated on the companies with an outperform rating giving United a price target of $113, upside of 19%, and Delta a price target of $71, upside of 24%. Pulte Group Inc. (PHM) and Lennar Corp. (LEN) gained over the week as October existing home sales rose 1.4% MoM beating consensus but fell 5.1% YoY. This was the first sequential gain in existing home sales in 7 months. American Airlines Group Inc. (AAL) crossed above the 100-day moving average as two longtime directors increased their ownership in the stock.
Exhibit 2: Significant Contributors to Performance, 11/16/18 - 11/23/18
| Name | Type | Return |
| United Continental Holdings | Equity | 2.8% |
| Pulte Group Inc. | Equity | 3.8% |
| Lennar Corp | Equity | 4.1% |
| Delta Air Lines Inc. | Equity | 2.3% |
| American Airlines Group Inc. | Equity | 3.3% |
Source: Miller Value Partners
Mallinckrodt (MNK) fell below its 50 and 100-day moving averages, after the issuance of an advisory opinion from the Office of Inspector General of the Department of Health and Human Services denying Mallinckrodt’s request to distribute free vials of Acthar to hospitals to encourage use in infantile spasms. Infantile spasms currently account for around 10% of Acthar use. Investors fear increased scrutiny of Acthar by healthcare stakeholders going forward. Bausch Health Companies Inc. (BHC) crossed below the 50 and 100-day moving average after a new competitor to BHC’s largest product, Xiafaxan, was approved on Friday. OneMain Holdings Inc. (OMF) declined over the week despite an in-line October trust data readout along with a director insider buy of 25k shares. There was minimal news on Amazon.com Inc. (AMZN) and Quotient Technology Inc. (QUOT).
Exhibit 3: Significant Detractors from Performance, 11/16/18 - 11/23/18
| Name | Type | Return |
| Mallinckrodt | Equity | -14.3% |
| Bausch Health Companies Inc. | Equity | -8.2% |
| Amazon.com Inc. | Equity | -5.7% |
| OneMain Holdings Inc. | Equity | -6.6% |
| Quotient Technology Inc. | Equity | -5.4% |
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.
©2018 Miller Value Partners, LLC
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