Last week, the Opportunity Equity strategy gained 5.71%, outperforming the S&P 500’s 2.63% rise (Exhibit 1). The strategy ended the week up 5.71% YTD, or 308 basis points ahead of the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 1/5/181
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (12/29 - 1/5) | 5.71% | 2.63% |
| MTD | 5.71% | 2.63% |
| QTD | 5.71% | 2.63% |
| YTD | 5.71% | 2.63% |
| Inception (annualized since 6/26/00) | 7.50% | 5.57% |
Source: Bloomberg, Miller Value Partners
OneMain Holdings Inc. (OMF) crossed above the 50 and 100-day moving average after it was announced that an investor group led by Apollo Global and Varde were planning to acquire the remainder of Fortress Investment Group’s stake in the company. Valeant Pharmaceuticals International Inc. (VRX) paid down an additional $300M of senior secured term loans using cash on hand. Endo Pharmaceuticals Holdings Inc. (ENDP) moved above the 100-day moving average. Leerink Partners initiated coverage of Endo with an outperform rating and a target price of $12, upside of 38%. Intrexon Corp. (XON) ended the week up after disclosing a $13.7M private placement with an entity affiliated with Chairman and CEO Randal J. Kirk. There was minimal news on RH (RH).
Exhibit 2: Significant Contributors to Performance, 12/29/17 - 1/5/18
| Name | Type | Return |
| OneMain Holdings Inc. | Equity | 32.9% |
| Valeant Pharmaceuticals International Inc. | Equity | 14.8% |
| RH | Equity | 7.8% |
| Endo Pharmaceuticals Holdings Inc. | Equity | 12.0% |
| Intrexon Corp. | Equity | 13.8% |
Source: Miller Value Partners
Delta Air Lines Inc. (DAL) released December traffic which fell 0.4% YoY with capacity increasing 0.9% YoY and load factor decreasing to 84.2% from 85.3% last year. The company reaffirmed 4Q guidance with the additional $25-50M impact from the blackout in ATL. There was no other news on the other top detractors.
Exhibit 3: Significant Detractors from Performance, 12/29/17 - 1/5/18
| Name | Type | Return |
| *Recently Added Security* | Equity | -1.9% |
| Pangaea One LP | Equity | -1.8% |
| *Recently Added Security* | Equity | -0.2% |
| Delta Air Lines Inc | Equity | -0.1% |
| Cash | Cash | 0.0% |
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.
©2017 Miller Value Partners, LLC
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