Last week, the Opportunity Equity strategy fell -2.27%, underperforming the S&P 500’s -0.74% loss (Exhibit 1). The strategy ended the week up 21.08% YTD, 1,654 basis points ahead of the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 3/19/211
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (3/12 - 3/19) | -2.27% | -0.74% |
| MTD | 4.23% | 2.78% |
| QTD | 21.08% | 4.55% |
| YTD | 21.08% | 4.55% |
| Inception (annualized since 6/26/00) | 9.74% | 6.95% |
Source: Bloomberg, Miller Value Partners
Facebook (FB) rose above the 100-day moving average after disclosing that the company had 1m active shops and 250m monthly users using Shops across Facebook and Instagram. This implies that roughly 10% of Facebook’s total current advertiser base have shops and that roughly 8% of Facebook’s global family monthly active users are using the shopping products. Discovery, Inc. (DISCA) continued to rise despite some insider selling. President & CEO of Discovery International, Jean-briac Perrerre, sold $15.1mm of shares, along with a couple of other directors. Macquarie cut the stock to underperform due to the run up in price with a price target of $52 (downside of 32.7%). Desktop Metal (DM) reported full year 2020 revenue of $16.5M vs their previous guidance of $15-25M with adjusted EBITDA coming in t -$73.5m vs guidance of -$64M. The company guided for revenue in excess of $100mm in 2021 including their acquisition of EnvisionTEC, and plan to exit this year with a revenue run rate of $160mm. The company announced that they are launching Desktop Health, a business line focused on patient specific additive manufacturing solution. Truist Securities reiterated their buy rating on Alibaba Group Holding Ltd. (BABA) while increasing their target to $330 (upside of 37.6%). The company continues to struggle with regulatory fallout, as news broke that the company was asked to dispose of their media assets. Chinese President Xi Jingping made comments later in the week suggesting that China’s crackdown on tech giants is just beginning warning that Beijing will go after “platform” companies. Teva Pharmaceutical (TEVA) rose through the 50-day moving average on limited news.
Exhibit 2: Significant Contributors to Performance, 3/12/21 - 3/19/21
| Name | Type | Return |
| Facebook Inc. | Equity | 8.1% |
| Discovery Inc. | Equity | 8.7% |
| Teva Pharmaceutical- SP ADR | Equity | 6.6% |
| Desktop Metal Inc. | Equity | 2.6% |
| Alibaba Group Holding Ltd. ADS | Equity | 3.4% |
Source: Miller Value Partners
Uber Technologies (UBER) dropped as the company agreed to reclassify 70,000 workers in the United Kingdom as employees after losing a Supreme Court appeal. The move is concerning as other countries could follow suit. Diamondback Energy Inc. (FANG) fell despite a strong majority of QEP shareholders approving the merger. UBS adjusted their price target from $70 to $110 (upside of 45.1%) on energy price increases and the company raised $2.2bn in a bond offering to pay down debt on more expensive notes. Precigen Inc. (PGEN) fell through the 50-day moving average despite the FDA granting their PRGN-2012 drug respiratory papillomatosis orphan drug status. OneMain Holdings Inc. (OMF) released February trust data that was consistent with expectations as credit metrics continue to normalize. Flexion Therapeutics (FLXN) fell through the 100-day moving average on limited news.
Exhibit 3: Significant Detractors from Performance, 3/12/21 - 3/19/21
| Name | Type | Return |
| Uber C32 1/22 | Derivative | -12.2% |
| Diamondback Energy Inc. | Equity | -7.6% |
| OneMain Holdings Inc. | Equity | -5.9% |
| Precigen Inc. | Equity | -8.6% |
| Flexion Therapeutics | Equity | -14.0% |
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.
©2020 Miller Value Partners, LLC
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