Last week, the Opportunity Equity strategy fell -0.69%, underperforming the S&P 500’s 1.39% gain (Exhibit 1). The strategy ended the week up 19.23% YTD, 731 basis points ahead of the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 4/16/211
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (4/9 - 4/16) | -0.69% | 1.39% |
| MTD | 2.20% | 5.41% |
| QTD | 2.20% | 5.41% |
| YTD | 19.23% | 11.92% |
| Inception (annualized since 6/26/00) | 9.62% | 7.28% |
Source: Bloomberg, Miller Value Partners
Alibaba Group Holding Ltd. (BABA) rose sharply on the company’s announcement that they have agreed to pay a $2.75bn fine to the Chinese Government over anti-trust violations. The stock rose on the news as the company does not expect further anti-monopoly investigations into other parts of their business, stemming concern of broader business restrictions. The Chemours Co. (CC) gained on a UBS report pointing to a sustained TiO2 demand upcycle. The stock was further supported by strong single-family housing starts rising +15% sequentially (+41% YoY) to 1.238M while permits came in at 1.199M, the highest growth rate since 2010. Diamondback Energy Inc. (FANG) released their preliminary 1Q results and updated their 2021 guidance. Total equivalent production volumes came in 4.2% above consensus, while oil production volumes were 5.8% above street estimates. The company expects 1Q capex of $280M-$300M, below analyst estimates of $350M. For 2021, the company expects total equivalent product volume of 360-370mboepd (0.5% below consensus) with oil production volumes of 218-222mbopd (0.3% below consensus) with total company CAPEX coming in at $1.6-1.75B (2.9% below consensus). The company plans to hold pro-forma volumes flat while prioritizing FCF generation, dividends and debt reduction. Uber Technologies (UBER) disclosed that March 2021 saw total bookings rise to the highest level of the company’s history with average daily mobility bookings increase 9% MoM and crossing a $30B annual run-rate with delivery at a $52B run-rate. The company reiterated its target for a EBITDA breakeven full quarter in 2021. There was limited news on Precigen (PGEN).
Exhibit 2: Significant Contributors to Performance, 4/9/21 - 4/16/21
| Name | Type | Return |
| Alibaba Group Holding Ltd. ADS | Equity | 6.9% |
| Precigen Inc. | Equity | 6.5% |
| The Chemours Co. | Equity | 8.2% |
| Diamondback Energy Inc. | Equity | 3.7% |
| Uber C32 1/22. | Derivative | 5.4% |
Source: Miller Value Partners
Norwegian Cruise Line Holdings Ltd (NCLH) fell as Barron’s published a negative piece on the industry, arguing that there are more risks than the market is factoring into the sector. By the end of the week, the company had requested a response from the CDC on their plan to restart cruising from US ports starting July 4th. Stitch Fix (SFIX) announced that Founder and CEO Katrina Lake will be stepping down as CEO, transitioning to Executive Chairman of the Board. Katrina will be replaced by Elizabeth Spaulding, currently President, effective August 1st. Desktop Metal (DM) continued to struggle as Stifel lowered their price target on the stock to $20 (upside of 57.5%) on a slower than expected near term ramp up in earnings. There was limited news on both Quotient Technology Inc. (QUOT) and Metromile Inc. (MILE).
Exhibit 3: Significant Detractors from Performance, 4/9/21 - 4/16/21
| Name | Type | Return |
| Norwegian Cruise Line Holdings Ltd. | Equity | -7.3% |
| Stitch Fix, Inc. | Equity | -11.3% |
| Desktop Metal Inc. | Equity | -10.1% |
| Quotient Technology Inc. | Equity | -4.3% |
| Metromile Inc. | Equity | -15.5% |
-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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