Last week, the Opportunity Equity strategy lost 4.67%, underperforming the S&P 500’s 1.22% decline (Exhibit 1). The strategy ended the week down -0.04% YTD, or 86 basis points ahead of the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 12/14/181
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (12/7 - 12/14) | -4.67% | -1.22% |
| MTD | -10.04% | -5.72% |
| QTD | -18.89% | -10.37% |
| YTD | -0.04% | -0.90% |
| Inception (annualized since 6/26/00) | 6.78% | 5.23% |
Source: Bloomberg, Miller Value Partners
Facebook Inc. (FB) gained over the week after increasing its buyback authorization by $9B. Genworth Financial Inc. (GNW) crossed above the 100-day moving average after holding their annual meeting. The company said they hope to complete the long-delayed acquisition by China Oceanwide early in 2019 and noted that they are not seeing a direct impact from the trade dispute between the US and China. Qualcomm Inc. (QCOM) gained over the week after winning a ruling in China against Apple that bans the sale of some iPhone models in that country. There was minimal news on NXP Semiconductors (NXPI).
Exhibit 2: Significant Contributors to Performance, 12/7/18 - 12/14/18
| Name | Type | Return |
| Facebook Inc. | Equity | 4.8% |
| Genworth Financial Inc. | Equity | 2.8% |
| NXP Semiconductors | Equity | 1.7% |
| Qualcomm Inc. | Equity | 2.9% |
| Cash | Cash | 0.0% |
Source: Miller Value Partners
Endo International (ENDP) crossed below the 200-day moving average while RH (RH) crossed below the 100-day moving average. RH announced that it is no longer exploring a $300m convertible note offering as its current capital structure and internally generated cash flow are sufficient to meet obligations and long-term growth objectives. Stitch Fix Inc. (SFIX) declined over the week after reporting 1Q results which beat expectations but disappointed on 2Q outlook. The company reported revenue of $366M, at the high-end of guidance, and above consensus of $358M due to a higher keep rate and an increase in revenue per client. Active clients grew 22.3% YoY but came in slightly below expectations of 23.5%. Adjusted EBITDA of $14.3M beat consensus of $8.1M and was above the high-end of guidance. The company guided for 2Q revenue range of $360-368M in line with consensus at $363m but guided for flat new account growth sequentially due to a planned decrease in advertising spend in 2Q during the holiday season. The company guided for adjusted EBITDA in 2Q of $8-12m (2.2-3.3% margin) below consensus of 3.3% margins at the midpoint. Management also raised the lower end of its FY19 revenue guidance range to $1.46-1.53B from $1.47-1.53B. There was minimal news on Endurance International Group Holdings (EIGI) and ADT Inc. (ADT).
Exhibit 3: Significant Detractors from Performance, 12/7/18 - 12/14/18
| Name | Type | Return |
| Endo International plc | Equity | -11.9% |
| RH | Equity | -7.6% |
| Endurance International Group Holdings | Equity | -11.5% |
| Stitch Fix, Inc. | Equity | -22.8% |
| ADT Inc | Equity | -8.0% |
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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