Last week, the Opportunity Equity strategy gained 6.55%, outperforming the S&P 500’s 6.46% gain. (Exhibit 1). The strategy ended the week down -29.82% YTD, 1,251 basis points behind the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 6/24/221
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (6/17 - 6/24) | 6.55% | 6.46% |
| MTD | -11.80% | -5.22% |
| QTD | -24.55% | -13.33% |
| YTD | -29.82% | -17.31% |
| Inception (annualized since 6/26/00) | 6.33% | 6.63% |
Source: Bloomberg, Miller Value Partners
Alibaba (BABA) rose after the PBOC accepted Ant Group’s application to set up a financial holding company. Chinese stocks were generally higher following President Xi Jinping’s pledge that the nation will strive to achieve 5.5% growth this year, increasing expectations that policymakers will take more action to support the economy. Norwegian Cruise Line Holdings Ltd. (NCLH) rose in sympathy with competitor Carnival Corporation (CCL) as it reported better than fearedQ2 2022 results with operating cash flow turning positive. Deutsche Bank cut its price target on the company to $17 from $23 (29% upside) while maintaining its hold rating. Alphabet Inc (GOOGL) rose above the 50-day moving average even as RBC cut its price target to $2,700 from $3,420 (14% upside) citing small and midsize ad spending as a risk. RBC upgraded Taylor Morrison Home Corp (TMHC) to an outperform rating while lowering its price target to $28 from $32 (20% upside). There was limited news on Amazon.com Inc (AMZN).
Exhibit 2: Significant Contributors to Performance, 6/17/22 - 6/24/22
| Name | Type | Return |
| Alibaba Group Holding Ltd. ADS | Equity | 15.0% |
| Norwegian Cruise Line Holdings Ltd | Equity | 15.7% |
| Alphabet Inc | Equity | 10.1% |
| Amazon.com Inc | Equity | 9.6% |
| Taylor Morrison Home Corp | Equity | 12.3% |
Source: Miller Value Partners
Ovintiv Inc (OVV), Diamondback Energy Inc (FANG), and Cleveland-Cliffs Inc (CLF) followed commodity prices lower. Diamondback fell below the 200-day moving average despite announcing that its Board had approved an increase to its return of capital commitment to at least 75% of FCF up from 50% previously. Additionally, the company announced its intention to increase its base dividend to $3/shr (2.4% yield) up from $2.80/shr previously. There was limited news on Green Thumb Industries Inc. (GTBIF) and TLT Puts (TLT P143 1/19/24) as long-term interest rates ended the week flat.
Exhibit 3: Significant Detractors from Performance, 6/17/22 - 6/24/22
| Name | Type | Return |
| Ovintiv Inc | Equity | -3.0% |
| Green Thumb Industries Inc. | Equity | -5.4% |
| Cleveland-Cliffs Inc | Equity | -3.6% |
| Diamondback Energy Inc | Equity | -2.1% |
| TLT P143 1/24 | Derivative | -0.2% |
Source: Miller Value Partners
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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
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