Last week, the Opportunity Equity strategy lost -11.89%, underperforming the S&P 500’s -7.03% decline (Exhibit 1). The strategy ended the week down -11.93% YTD, or 406 basis points behind the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 12/21/181
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (12/14 - 12/21) | -11.89% | -7.03% |
| MTD | -20.74% | -12.35% |
| QTD | -28.53% | -16.67% |
| YTD | -11.93% | -7.87% |
| Inception (annualized since 6/26/00) | 6.04% | 4.81% |
Source: Bloomberg, Miller Value Partners
Genworth (GNW) rose as their deal to be acquired by China Oceanwide Holdings Group was approved by the Delaware Department of Insurance, as well as Fannie Mae and Freddie Mac. Homebuilder Pulte Group (PHM) fell despite November housing starts rising 3.2% to 1,256K which was above the street’s estimate for 1,228K, driven by multi-family up 14.8%. Weakness stemmed from the NAHB Builder Survey for December falling four points to 56, below consensus estimates of 60, as well as a 25bps hike in the fed funds rate. Qualcomm (QCOM) won an injunction in Germany that allows a ban on the sale of some iPhone models. There was no news on GTY Technology Holdings (GTYHU).
Exhibit 2: Significant Contributors to Performance, 12/14/18 - 12/21/18
| Name | Type | Return |
| Genworth Financial | Equity | 1.3% |
| Cash | Cash | 0.0% |
| GTY Technology Holdings | Equity | -1.4% |
| Pulte Group | Equity | -1.5% |
| Qualcomm Inc | Equity | -4.8% |
Source: Miller Value Partners
Endo Pharmaceuticals (ENDP) fell despite a bullish note from RBC post-management meetings, where the company remains enthusiastic on CCH opportunities, sees core generic trends stabilizing, and noted that the brand/sterile injectable growth continues to be robust. The analyst has an “Outperform” rating on the stock and a $24 price-target, 220% implied upside. Bausch Health Companies (BHC) announced they are paying down an additional $76M of its senior secured term loans, eliminating all mandatory amortization for 1Q19. Shares fell below their 200-day moving average. Amazon (AMZN) fell on a report that Diego Piacentini, former Senior VP of Amazon’s International Consumer Business is not returning to the company following a two-year hiatus where he is working for the Italian government. Prior to his leave, Piacentini was the third-largest employee shareholder. RH (RH) fell below its 50 and 200-day moving averages. Teva Pharmaceuticals (TEVA) announced positive topline results from a Phase 3 study evaluating the efficacy and safety of fremanezumab for the preventive treatment of migraines in adult patients. Further, the company announced the FDA approved their ProAir Digihaler, a digital inhaler that combines albuterol with a build in-electric module and mobile app.
Exhibit 3: Significant Detractors from Performance, 12/14/18 - 12/21/18
| Name | Type | Return |
| Endo International plc | Equity | -24.7% |
| Bausch Health Companies | Equity | -20.8% |
| Amazon.com Inc | Equity | -13.5% |
| RH | Equity | -10.5% |
| Teva Pharmaceuticals | Equity | -18.2% |
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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