Last week, the Opportunity Equity strategy gained 3.84%, outperforming the S&P 500’s 2.76% increase (Exhibit 1). The strategy ended the week up 23.62% YTD, 883 basis points ahead of the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 6/25/211
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (6/18 - 6/25) | 3.84% | 2.76% |
| MTD | 2.95% | 1.92% |
| QTD | 5.96% | 8.11% |
| YTD | 23.62% | 14.79% |
| Inception (annualized since 6/26/00) | 9.72% | 7.34% |
Source: Bloomberg, Miller Value Partners
Keybanc increased their price target on Diamondback Energy Inc. (FANG) from $98 to $102 (upside of 5.9%), while maintaining their overweight rating on the stock while BMO Capital raised their price target to $110 from $100 (upside of 14%) while maintaining the stock at market perform. The company fully redeemed the $191mm of their 4.625% senior notes due in 2021. Canada Goose Holdings (GOOS) rose through the 50-day and 100-day moving averages as Wells Fargo published a bullish report on the company focusing on the Direct to Consumer (DTC) opportunity. The company announced that it will cease buying fur by the end of this year, and will use alternatives in all of their jackets by the end of next year. OneMain Holdings’ (OMF) credit performance continued to exceed expectations with May consolidated net charge-offs (NCO) and delinquency rates showing continued decline on a YoY basis. Delinquencies were down -16% YoY to 2.23% while NCOs were down -31% YoY hitting 3.67% vs 5.36% last year. Management spoke later in the week at an investor conference highlighting an increase in loan demand following a dip in demand seen after the government stimulus in March. The company’s credit card launch is on track to begin testing in 2021 with a more substantial rollout in 2022. There was limited news on DXC Technology Company (DXC).
Exhibit 2: Significant Contributors to Performance, 6/18/21 - 6/25/21
| Name | Type | Return |
| DXC Technology Company | Equity | 8.8% |
| Diamondback Energy Inc. | Equity | 11.8% |
| *New Security* | Equity | 9.4% |
| Canada Goose Holdings | Equity | 14.4% |
| OneMain Holdings Inc. | Equity | 8.4% |
Source: Miller Value Partners
The Teamsters approved a plan at their international conference to help organize and unionize Amazon.com Inc. (AMZN) workers nationwide, causing consternation for investors. The company held their annual Prime Day last week, and highlighted that they sold more than 250m items, up 8% from 2020 levels. Credit Suisse initiated coverage on Desktop Metal (DM) with a ‘hold’ rating and a $14 price target (upside of 16.7%), citing lots of potential but a high current valuation.
Exhibit 3: Significant Detractors from Performance, 6/18/21 - 6/25/21
| Name | Type | Return |
| *New Security* | Equity | -10.5% |
| *New Security* | Currency | -7.1% |
| AMZN C3050 1/23 | Equity | -8.4% |
| Amazon.com Inc. | Equity | -2.5% |
| Desktop Metal Inc. | Equity | -4.5% |
-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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