Last week, the Opportunity Equity strategy gained 2.83%, underperforming the S&P 500’s 3.85% return. (Exhibit 1). The strategy ended the week down -2.36% YTD, 2,952 basis points behind the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 12/10/211
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (12/3 - 12/10) | 2.83% | 3.85% |
| MTD | -1.58% | 3.23% |
| QTD | -6.51% | 9.69% |
| YTD | -2.36% | 27.16% |
| Inception (annualized since 6/26/00) | 8.30% | 7.69% |
Source: Bloomberg, Miller Value Partners
Norwegian Cruise Line Holdings Ltd. (NCLH) gained along with other travel-company stocks on reopening optimistic after Pfizer and BioNTech said initial lab studies show a third dose of their COVID-19 vaccine may be effective at neutralizing the omicron variant. Alibaba Holdings Ltd (BABA) announced management changes with Mr. Toby Hong Xu succeeding Ms. Maggie Wei Wu as the CFO, effective April 1, 2022. The company also announced the formation of two business units, China Digital Commerce and International Digital Commerce. Taylor Morrison Home Corp (TMHC) rose in sympathy with other homebuilders after its competitor Toll Brothers Inc. (TOL) reported strong Q4 earnings. Diamondback Energy (FANG) rose above its 50-day moving average after CEO Travis Stice announced plans to reduce methane emissions by 70% as part of the firm’s ESG initiative. Truist raised their price target for Diamondback to $150, up from $148, upside of 35%. There was limited news on Meta Platforms Inc. (FB).
Exhibit 2: Significant Contributors to Performance, 12/3/21 - 12/10/21
| Name | Type | Return |
| Norwegian Cruise Line Holdings Ltd. | Equity | 17.7% |
| Alibaba Group Holdings Ltd. ADS | Equity | 11.7% |
| Meta Platforms Inc | Equity | 7.5% |
| Taylor Morrison Home Corp | Equity | 6.5% |
| Diamondback Energy | Equity | 4.9% |
Source: Miller Value Partners
Stitch Fix (SFIX) fell after the company reported Q4 earnings that beat but disappointed on forward guidance. Revenue of $581.2M (+18.5% Y/Y) came in above consensus of $571M (vs. guidance for $560-575M) and adj. EBITDA of $38.2M exceeded consensus expectations of $18M. Active clients grew 11% Y/Y to 4.18M. Management guided for F2Q22 revenue of $505-520M (0-3% Y/Y), below consensus of $585M while also lowering its FY22 guidance to “high-single-digit” Y/Y growth from >15% previously. There was limited news on WW International Inc (WW), Matterport Inc. (MTTR), and Splunk Inc (SPLK).
Exhibit 3: Significant Detractors from Performance, 12/3/21 - 12/10/21
| Name | Type | Return |
| Stitch Fix, Inc. | Equity | -17.9% |
| WW International Inc | Equity | -7.7% |
| Matterport Inc. | Equity | -7.9% |
| Splunk Inc | Equity | -3.0% |
| *New Security* | Equity | -3.7% |
-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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