Last week, the Opportunity Equity strategy gained 1.29%, outperforming the S&P 500’s 1.27% rise (Exhibit 1). The strategy ended the week down -3.08% YTD, or 397 basis points behind the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 7/17/201
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (7/10 - 7/17) | 1.29% | 1.27% |
| MTD | 7.54% | 4.10% |
| QTD | 7.54% | 4.10% |
| YTD | -3.08% | 0.89% |
| Inception (annualized since 6/26/00) | 7.10% | 6.11% |
Source: Bloomberg, Miller Value Partners
Imperial Capital maintained their “Overweight” rating on ADT Inc (ADT) with a $9 price target, 11% implied upside from current levels. Taylor Morrison Home Corp (TMHC) gained in sympathy with strong June housing starts and permits, jumping 17.3% and 12.0%, respectively. RH (RH) advanced in conjunction with Census Bureau data showing overall retail sales rising 7.3% M/M for June following the 12.1% gain in May. The two-month stack has nearly offset the entire decline seen during the prior two months. Flexion (FLXN) gained after announcing preliminary Q2 net sales of $15.4M, topping consensus of $10M on sequentially flat units sold. Additionally, the company announced plans to restart manufacturing in Q4 and implying they are working through inventory at a healthy pace. There was no news related to Tivity Health (TVTY).
Exhibit 2: Significant Contributors to Performance, 7/10/20 - 7/17/20
| Name | Type | Return |
| ADT Inc | Equity | 7.6% |
| Tivity Health | Equity | 15.2% |
| Taylor Morrison Home Corp | Equity | 8.6% |
| RH | Equity | 9.3% |
| Flexion Therapeutics | Equity | 9.8% |
Source: Miller Value Partners
Tech names underperformed the broad equity market last week. Amazon (AMZN) fell despite solid June retail sales and sell-side optimism. Cowen and Morgan Stanley both raised their price target to $3,700 (+18% implied upside) and $3,450 (+10% implied upside), respectively. UBS downgraded Peloton (PTON) to “Neutral” from “Buy” but raised their price target to $58 (from $48), 9% implied downside from current levels, citing shares look fairly valued based on their expectations for forward subscriber and revenue growth. Alibaba (BABA) founder Jack Ma disclosed he cut his stake in the company from 6.4% to 4.8% over the past year. Stitch Fix (SFIX) fell over the week, though RBC raised their price target to $35 (34% upside) and named it a top pick on expectations for a valuation re-rating opportunity as online penetration accelerates and apparel sales continue to shift towards digital. There was no news on Workday (WDAY).
Exhibit 3: Significant Detractors from Performance, 7/10/20 - 7/17/20
| Name | Type | Return |
| Amazon.com Inc | Equity | -7.4% |
| Peloton Interactive | Equity | -14.5% |
| Alibaba Group Holdings | Equity | -5.3% |
| Stitch Fix | Equity | -6.4% |
| Workday | Equity | -6.7% |
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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