Last week, the Opportunity Equity strategy gained 3.85%, outperforming the S&P 500’s 1.57% gain. (Exhibit 1). The strategy ended the week down -6.08% YTD, 61 basis points behind the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 2/4/221
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (1/28 - 2/4) | 3.85% | 1.57% |
| MTD | -0.08% | -0.31% |
| QTD | -6.08% | -5.47% |
| YTD | -6.08% | -5.47% |
| Inception (annualized since 6/26/00) | 7.89% | 7.41% |
Source: Bloomberg, Miller Value Partners
DXC Technology Company (DXC) rose above its 50, 100 and 200-day moving averages after the company reported $4.09B in revenues and $0.92 in adjusted EPS, in-line with consensus estimates of $4.1B / $0.91. The company tightened up 2022 guidance with Revenue now expected to be at the low-end of the prior guidance of $16.4-16.6B with the EPS ranged move to $3.64-3.69 from $3.52-3.72 previously. The company generated strong free cash flow in the quarter of $550M leading the company to raise its FY22 FCF guidance to above $650M (up from $500M previously). The company announced a new $1B buyback program that will be funded via asset divestments and internal cash generation. Amazon.com (AMZN) rose after reporting revenues of $137.4 billion in line with the expectations at $137.7 billion with operating income beating consensus by 50% coming in at $3.5 billion ahead of $2.3 billion expected. The company guided for 1Q net sales of $112-117B below consensus of $121B with operating income expected to be between $3-6B also below consensus of $6.4B. The company also announced that it will be increasing its prime membership fee to $139 from $119 in the US this February. Alphabet Inc (GOOGL) rose above its 50, 100, and 200-day moving averages after the company reported 4Q21 revenue of $75.3 billion beating expectations for $72.2 billion with adjusted operating income coming in at $21.9 billion vs expectations for $21.3 billion leading to EPS of $30.69 vs $27.64 expected. After earnings the company announced a 20-for-1 stock split. There was limited news on JD.com Inc (JD).
Exhibit 2: Significant Contributors to Performance, 1/28/22 - 2/4/22
| Name | Type | Return |
| DXC Technology Company | Equity | 21.5% |
| AMZN C3050 1/23 | Derivative | 55.8% |
| Amazon.com | Equity | 9.5% |
| JD 1/24 C75 | Derivative | 18.0% |
| Alphabet Inc | Equity | 7.5% |
Source: Miller Value Partners
Meta Platforms Inc. (FB) fell after reporting mixed results and providing soft 1Q guidance. The company reported revenue of $33.7B beating expectations of $33.4B while operating income disappointed coming in at $12.6B vs $13.2B expected leading to an EPS miss of $3.67 vs $3.85 expected. Both monthly active uses (MAUs) and daily active users (DAUs) missed expectations with MAUs of 2.91B vs 2.95B expected and DAUs of 1.93 vs 1.95B expected. The company guided for 1Q revenue of $27-29B below consensus of $30.2B but lowered full year total expenses to $95-95B from $91-97B previously while keeping CAPEX guidance unchanged. The company repurchased $19B in stock during the quarter (2% of shares outstanding) and has $39B remaining on its buyback program (6% of shares outstanding). Herbalife Nutrition Ltd. (HLF) fell through its 50 and 100-day moving averages. There was limited news on Precigen Inc. (PGEN), Vontier Corp (VNT), and Farfetch Ltd (FTCH).
Exhibit 3: Significant Detractors from Performance, 1/28/22 - 2/4/22
| Name | Type | Return |
| Meta Platforms Inc | Equity | -21.4% |
| Herbalife Nutrition Ltd | Equity | -8.6% |
| Precigen Inc. | Equity | -8.9% |
| Vontier Corp | Equity | -2.2% |
| Farfetch Ltd | Equity | -1.1% |
-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. Portfolio composition is shown as of a point in time and is subject to change without notice.
©2022 Miller Value Partners, LLC
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