Last week, the Opportunity Equity strategy fell -4.65%, underperforming the S&P 500’s 1.58% gain (Exhibit 1). The strategy ended the week up 15.46% YTD, 926 basis points ahead of the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 3/26/211
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (3/19 - 3/26) | -4.65% | 1.58% |
| MTD | -0.61% | 4.40% |
| QTD | 15.46% | 6.20% |
| YTD | 15.46% | 6.20% |
| Inception (annualized since 6/26/00) | 9.48% | 7.03% |
Source: Bloomberg, Miller Value Partners
Acuity Brands (AYI) was upgraded by William Blair to outperform, while CS increased their price target from $144 to $152 (upside of 4.4%). Taylor Morrison Home Corp (TMHC) rose despite February new home sales data that was below street expectations. Sales dropped sequentially to 775k, which was below street estimates of 870k. On a 3-month moving average basis, new home sales are averaging 881k, up 19% YoY. Goldman Sachs reiterated their buy rating on ADT Inc. (ADT) with a price target of $13 (upside of 58.3%) as they believe the company is well positioned to capitalize on growth opportunities to accelerate revenue growth in the comping year. Rocket Companies, Inc. (RKT) rose as the company announced that its affiliate Rocket Mortgage has partnered with Intuit’s Mint app to allow fully digital end-to-end mortgage experience allowing home buyers to be approved in as little as eight minutes. There was limited news on OneMain Holdings Inc. (OMF).
Exhibit 2: Significant Contributors to Performance, 3/19/21 - 3/26/21
| Name | Type | Return |
| Acuity Brands, Inc. | Equity | 6.8% |
| Taylor Morrison Home Corp | Equity | 4.9% |
| OneMain Holdings Inc. | Equity | 2.9% |
| ADT, Inc | Equity | 3.3% |
| Rocket Companies, Inc. | Equity | 3.7% |
Source: Miller Value Partners
Discovery Inc. (DISCA) posted the largest one-day drop in company’s history Friday, falling through the 50-day moving average. The move is speculated to be the result of the liquidation of positions of Archegos Capital Management resulting in the sales of $30B of stock. Prior to Friday, UBS raised their price target from $24 to $46 (upside of 9.8%) but downgraded the stock to Sell, while Wells Fargo cut their price target from $65 to $59 (upside of 40.8%). Desktop Metal (DM) fell below the 100-day moving average as Lake Street initiated on the company with a price target of $11 (downside of 29.9%). Farfetch Ltd. (FTCH) fell through the 100-day moving average despite the UBS adjusting their price target from $77 to $80 (upside of 57.0%) and maintaining a buy rating on the stock. The company was swept up in the same liquidation as DISCA, which sent the stock sharply lower on Friday. Norwegian Cruise Line Holdings Ltd. (NCLH) dropped through the 50-day moving average as the CDC said the ban on US cruises until November 1st is still in place. There was limited news on WW International (WW) during the week.
Exhibit 3: Significant Detractors from Performance, 3/19/21 - 3/26/21
| Name | Type | Return |
| Discovery Inc. | Equity | -45.8% |
| Desktop Metal Inc. | Equity | -25.1% |
| Farfetch Ltd. | Equity | -12.7% |
| WW International | Equity | -10.8% |
| Norwegian Cruse Line Holdings Ltd. | Equity | -9.4% |
-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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