Last week, the Opportunity Equity strategy gained 5.23%, outperforming the S&P 500’s 2.57% rise. (Exhibit 1). The strategy ended the week down -29.92% YTD, 1,375 basis points behind the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 7/22/221
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (7/15 - 7/22) | 5.23% | 2.57% |
| MTD | 6.79% | 4.73% |
| QTD | 6.79% | 4.73% |
| YTD | -29.92% | -16.17% |
| Inception (annualized since 6/26/00) | 6.30% | 6.67% |
Source: Bloomberg, Miller Value Partners
Farfetch Ltd (FTCH) rose above the 50-day moving average. Keybanc initiated on the name with an Outperform rating and a $11 price target (32% upside) while Piper Sandler initiated with a neutral rating and a $9 target (8% upside). Ovintiv Inc (OVV) rose above the 200-day moving average as the name experienced several price target and ratings changes. Bank of America upgraded the name to a Buy rating with a $60 price target (35% upside) while Morgan Stanley maintained its overweight rating but lowered its price target to $64 (44% upside). Both Truist and Mizuho maintained their buy rating on the name with Truist raising their price target to $77 (73% upside) while Mizuho lowered their price target to $69 (55% upside). Amazon.com Inc (AMZN) announced the acquisition of primary healthcare platform One Medical (ONEM) for $18/share in an all-cash transaction valued at $3.9B (3.6x 2022 Revenue). JP Morgan maintained its underweight rating on DXC Technology Company (DXC) and lowered its price target from $39 to $33 (6% upside).
Exhibit 2: Significant Contributors to Performance, 7/15/22 - 7/22/22
| Name | Type | Return |
| Farfetch Ltd | Equity | 26.1% |
| Ovintiv Inc | Equity | 8.0% |
| *New Security* | Equity | 40.5% |
| Amazon.com Inc | Equity | 7.8% |
| DXC Technology Company | Equity | 7.9% |
Source: Miller Value Partners
Alphabet Inc (GOOGL) fell in sympathy with other internet advertising shares after Snap Inc. reported Q2 results that came in well below expectations with Snap’s management noting that revenue to date in Q3 is flat y/y, despite easier comps. Alibaba Group Holding Ltd. (BABA) fell through the 50 and 100-day moving averages in sympathy with other Chinese Internet names after Didi Chuxing was fined $1.2B for violating China’s cybersecurity and personal information protection laws, in the conclusion of a yearlong investigation. Bernstein upgraded Alibaba from market-perform to outperform, raising its price target from $115 to $130 per share (29% upside). Karuna Therapeutics Inc (KRTX) fell on limited news. Our TLT Puts (TLT P143 1/24) followed interest rates lower over the course of the week.
Exhibit 3: Significant Detractors from Performance, 7/15/22 - 7/22/22
| Name | Type | Return |
| Alphabet Inc | Equity | -3.5% |
| *New Security* | Equity | -5.4% |
| Karuna Therapeutics Inc | Equity | -4.7% |
| Alibaba Group Holding Ltd. ADS | Equity | -1.7% |
| TLT P143 1/24 | Derivative | -6.2% |
Source: Miller Value Partners
Check out the Income Strategy weekly Update. Click to Read.
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. There is no guarantee that market trends discussed herein will continue. 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
Share