Last week, the Opportunity Equity strategy gained 5.02%, outperforming the S&P 500’s 1.79% rise (Exhibit 1). The strategy ended the week down -4.32% YTD, or 394 basis points behind the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 7/10/201
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (7/2 - 7/10) | 5.02% | 1.79% |
| MTD | 6.17% | 2.79% |
| QTD | 6.17% | 2.79% |
| YTD | -4.32% | -0.38% |
| Inception (annualized since 6/26/00) | 7.03% | 6.05% |
Source: Bloomberg, Miller Value Partners
Farfetch Ltd (FTCH) continued to gain last week after China Renaissance upgraded the name to a buy rating and a PT of $33, upside of 55%. Citi raised their price target on Amazon.com Inc. (AMZN) to $3,550 up from $2,700, upside of 11%. Alibaba Group Holdings (BABA) gained over the week after it was reported that Alibaba’s financial arm, Ant Financial, plans a Hong Kong IPO targeting over $200B valuation. Taylor Morrison Home Corp. (TMHC) crossed above the 200-day moving average after announcing preliminary 2Q results which showed orders up 23% YoY driven by sales up 8% YoY. Orders in June alone were up 94% YoY.
Exhibit 2: Significant Contributors to Performance, 7/2/20 - 7/10/20
| Name | Type | Return |
| Farfetch Ltd | Equity | 12.4% |
| Amazon.com Inc. | Equity | 10.7% |
| Alibaba Group Holdings | Equity | 16.1% |
| Taylor Morrison Home Corp. | Equity | 15.2% |
| *Recently Added Security* | Equity | 22.4% |
Source: Miller Value Partners
Energy Transfer LP (ET) declined over the week after a federal court ordered Energy Transfer to shut down the Dakota Access Pipeline (DAPL) by August 5th while the US Army Corps. Of Engineers prepares its Environmental Impact Statement which could take up to 13 months to complete. A federal judge rejected the company’s request to keep the DAPL open while it appeals the court’s shutdown order. The company owns ~36.4% of the pipeline which the company expects to generate roughly $1.4B in 2021 EBITDA implying an EBITDA hit of $510M to ET for a full year period. Energy Transfer is appealing the decision to the US DC Circuit Court of Appeals. Bausch Health Companies Inc. (BHC) crossed below the 50-day moving average. Bank of America maintained their underperform rating on the stock but increased their price target to $14 from $12, downside of -19%. United Airlines Holdings Inc. (UAL) fell over the week after publishing a slide deck that showed industry domestic travel down 78% in July with international travel down 87%. For United specifically, they showed that flights not out of New York were down 73% compared to New York flights down 84% in July. The company noted that they expect capacity for the rest of the year to be consistent with August levels which they expect to be down 65% YoY. There was minimal news on Flexion Therapeutics (FLXN).
Exhibit 3: Significant Detractors from Performance, 7/2/20 - 7/10/20
| Name | Type | Return |
| Flexion Therapeutics | Equity | -9.6% |
| Bausch Health Companies Inc | Equity | -6.1% |
| *Recently Added Security* | Equity | -8.8% |
| Energy Transfer LP | Equity | -8.5% |
| United Airlines Holdings Inc. | Equity | -4.1% |
Source: Miller Value Partners
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.
©2019 Miller Value Partners, LLC
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