Last week, the Opportunity Equity strategy fell by -3.87%, underperforming the S&P 500’s -1.24% loss. (Exhibit 1). The strategy ended the week down -10.01% YTD, 455 basis points behind the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 4/8/221
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (4/1 - 4/8) | -3.87% | -1.24% |
| MTD | -3.25% | -0.90% |
| QTD | -3.25% | -0.90% |
| YTD | -10.01% | -5.46% |
| Inception (annualized since 6/26/00) | 7.62% | 7.35% |
Source: Bloomberg, Miller Value Partners
Our TLT Puts (TLT P143 1/19/24) rose over the week as rates resumed their upward march. Barclays upgraded Teva Pharmaceuticals (TEVA) to an overweight rating from equal weight with a $13 price target (25% upside). Diamondback Energy (FANG) announced a cash hedging loss of $285M in 1Q22. The company also terminated around 25,000 Bopd of various oil hedges in 2022, taking an early termination cash loss of around $135M. Piper Sandler raised its price target on the name to $181 (27% upside) up from $163. There was limited news on Bausch Health Companies Inc (BHC). Guggenheim raised their price target on Karuna Therapeutics Inc. (KRTX) from $175 to $200 (48% upside).
Exhibit 2: Significant Contributors to Performance, 4/1/22 - 4/8/22
| Name | Type | Return |
| TLT P 143 1/24 | Derivative | 26.1% |
| Teva Pharmaceuticals | Equity | 10.8% |
| Diamondback Energy Inc | Equity | 2.7% |
| Bausch Health Companies Inc | Equity | 1.5% |
| Karuna Therapeutics Inc. | Equity | 2.8% |
Source: Miller Value Partners
Norwegian Cruise Line Holdings Ltd. (NCLH) fell through the 50-day and 100-day moving averages. The company announced it will launch its first collection of NFTs, selling six art pieces by Manuel Di Rita, who designed the hull art on the record-breaking Norwegian Prima and her sister vessel Norwegian Viva. The CEO Frank Del Rio announced that he expects the company’s full fleet to be back in operation by early May. Coinbase Global Inc Ordinary Shares (COIN) fell below its 50-day moving average after Mizuho cut its price target to $190, maintaining its neutral rating (18% upside). DA Davidson lowered their estimates for COIN given lackluster trading volume while maintaining their buy rating and price target of $225 (40% upside). Amazon.com Inc (AMZN) fell through the 50 and 100-day moving averages in the wake of the company’s Staten Island, New York workforce voting to unionize. ADT Inc (ADT) fell through the 50-day moving average, while Splunk Inc (SPLK) fell through the 200-day moving average on limited news.
Exhibit 3: Significant Detractors from Performance, 4/1/22 - 4/8/22
| Name | Type | Return |
| Splunk Inc | Equity | -10.3% |
| Norwegian Cruise Line Holdings Ltd. | Equity | -8.6% |
| Coinbase Global Inc Ordinary Shares | Equity | -13.9% |
| ADT Inc | Equity | -8.3% |
| Amazon.com Inc | Equity | -5.6% |
Source: Miller Value Partners
Check out the Income Strategy weekly Update. Click to Read.
1 The performance figures reflect the deduction of a model investment management fee of 1% (the highest fee for separate accounts under our fee schedule) and certain other expenses. For important information about Opportunity Equity Strategy performance, please click on the Opportunity Equity Strategy 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 based on the representative account 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
Share