Last week, the Opportunity Equity strategy gained 3.14%, outperforming the S&P 500’s 1.97% gain (Exhibit 1). The strategy ended the week up 14.86% YTD, 354 basis points behind the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 7/23/211
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (7/16 - 7/23) | 3.14% | 1.97% |
| MTD | -5.49% | 2.74% |
| QTD | -5.49% | 2.74% |
| YTD | 14.86% | 18.41% |
| Inception (annualized since 6/26/00) | 9.30% | 7.47% |
Source: Bloomberg, Miller Value Partners
Facebook Inc. (FB) rose in sympathy with strong earnings from both Twitter and Snapchat. Twitter had revenue of $1.19bn which crushed estimates for $1.05bn, and Snapchat had revenue of $982mm against estimates for just $846m. The strong recovery in ad spending on social media platforms has increased optimism about upcoming earnings. Credit Suisse raised their price target from $400 to $480 (upside of 29.2%), and Jeffries raised their target from $385 to $400 (upside of 7.7%). Norwegian Cruise Line Holdings Ltd. (NCLH) gained over the week as Truist published a report that showed premium-priced cruises for 2022 are booking at prices 50-55% above 2019 levels. About 1/3rd of Norwegian cruises are luxury. Stitch Fix (SFIX) rose through the 50-day, 100-day, and 200-day moving average. There was minimal news on Splunk Inc. (SPLK).
Exhibit 2: Significant Contributors to Performance, 7/16/21 - 7/23/21
| Name | Type | Return |
| *New Security* | Equity | 25.3% |
| Facebook Inc. Cl A | Equity | 8.4% |
| Stitch Fix, Inc. | Equity | 10.7% |
| Norwegian Cruise Line Holdings Ltd. | Equity | 7.7% |
| Splunk Inc. | Equity | 5.5% |
Source: Miller Value Partners
Alibaba Group Holding Ltd. (BABA) was hit with the prospect of further regulatory issues as China cracked down on education tech stocks. While not directly in the line of fire, the continuing crackdowns are causing concerns that the new regulatory tightening might last longer than previously expected. Wells Fargo released a positive report on Precigen Inc. (PGEN) that discussed the company’s vaccine candidate, PRGN-2012, for the treatment of recurrent respiratory papillomatosis (RRP). Interim Phase 1 data is expected by 2021 year-end, which could allow for discussion with regulators in 2022. General Motors (GM) declined after it was reported that some additional GM plants had to pause production because of the continued semi-conductor shortage, with the pauses affecting full-size pickups. There was limited news on Desktop Metal (DM) and Ziopharm Oncology Inc. (ZIOP).
Exhibit 3: Significant Detractors from Performance, 7/16/21 - 7/23/21
| Name | Type | Return |
| Alibaba Group Holding Ltd. ADS | Equity | -2.3% |
| Precigen Inc. | Equity | -3.4% |
| Desktop Metal Inc. | Equity | -3.1% |
| Ziopharm Oncology Inc. | Equity | -4.7% |
| General Motors Co. | Equity | -0.9% |
-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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