Last week, the Opportunity Equity strategy fell -6.83%, underperforming the S&P 500’s -0.96% loss (Exhibit 1). The strategy ended the week up 11.37% YTD, 475 basis points behind the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 7/16/211
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (7/9 - 7/16) | -6.83% | -0.96% |
| MTD | -8.37% | 0.75% |
| QTD | -8.37% | 0.75% |
| YTD | 11.37% | 16.12% |
| Inception (annualized since 6/26/00) | 9.15% | 7.38% |
Source: Bloomberg, Miller Value Partners
Alibaba Group Holding Ltd. (BABA) rose over the week after reports that the company may open up their platform to competitor, Tencent and vice versa. The move comes as regulators continue to probe anti-competitive practices in the country. The stocks also benefit from the news that Tencent received approval of their acquisition of Sogou, a search engine developer. Arete lowered their price target on the name from $250 to $192 (downside of 9.5%) on concerns that the regulatory overhang on Chinese tech stocks will continue with ‘no end in sight’. Deutsche Bank trimmed its target from $282 to $281 (upside of 32.5%), on concerns about weakness in the current quarter. Alphabet Inc. (GOOGL) gained after Cowen raised their price target to $2,900 up from $2,700 (upside of 14.2%) based on Search strength amid the ongoing ad market recovery. There was limited news on GTY Technology Holdings Inc. (GTYH) and Pangaea One L.P.
Exhibit 2: Significant Contributors to Performance, 7/9/21 - 7/16/21
| Name | Type | Return |
| Alibaba Group Holding Ltd. | Equity | 3.0% |
| Alphabet Inc | Equity | 1.2% |
| Cash | Cash | 0.0% |
| GTY Govtech Inc. - Warrant | Derivative | -6.7% |
| Pangaea One, L.P. | Equity | -1.3% |
Source: Miller Value Partners
Norwegian Cruise Line Holdings Ltd. (NCLH) crossed below the 200-day moving average as the global COVID-19 case count inflected turning positive again as the Delta variant continues to spread around the world. Diamondback Energy Inc. (FANG) fell through the 50 and 100-day moving average while Energy Transfer LP (ET) fell through the 50-day moving average as oil prices continued to decline. Stitch Fix Inc. (SFIX) fell through the 50, 100 and 200-day moving average while WW International Inc. (WW) fell below the 100-day moving average on limited news.
Exhibit 3: Significant Detractors from Performance, 7/9/21 - 7/16/21
| Name | Type | Return |
| Norwegian Cruise Line Holdings Ltd. | Equity | -15.8% |
| Diamondback Energy Inc | Equity | -12.4% |
| Stitch Fix, Inc. | Equity | -13.7% |
| WW International Inc | Equity | -10.3% |
| Energy Transfer LP | Equity | -8.6% |
-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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