Last week, the Opportunity Equity strategy lost -1.25%, underperforming the S&P 500’s -0.27% decline (Exhibit 1). The strategy ended the week down -4.29% YTD, or 491 basis points behind the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 7/24/201
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (7/17 - 7/24) | -1.25% | -0.27% |
| MTD | 6.20% | 3.82% |
| QTD | 6.20% | 3.82% |
| YTD | -4.29% | 0.62% |
| Inception (annualized since 6/26/00) | 7.02% | 6.09% |
Source: Bloomberg, Miller Value Partners
Goldman Sachs and Wedbush raised their price targets on Peloton Interactive Inc. (PTON) to $84 (from $66) and $66 (from $63), respectively, representing upside of 36% and 7%. OneMain Holdings Inc. (OMF) crossed above the 50-day moving average after trust data indicated that 2Q losses are tracking slightly better than consensus. In June, the 30Day+ delinquencies feel to 2.68% in June down from the 2.90% level seen in May while the <30Day moved to 5.84% in June, up 72bps from the 5.12% in May. Bank of American Corp. (BAC) crossed above the 50 and 100-day moving average. Berkshire Hathaway Inc. purchased 33.9m shares of Bank of American in July. The company had announced earnings the previous week with 2Q EPS of $0.37 beating consensus of $0.28. The beat was helped by strong trading and investment banking revenues, which helped to partially offset the $4B in credit reserve build. Net interest income came in below expectations ($11B, -11% YoY) and the company guided for NII to be lower by $200M QoQ going forward due to loan paydowns. Taylor Morrison Home Corp. (TMHC) gained over the week after BTIG upgraded the name to buy with a price target of $30, 25% upside. June new home sales rose 13.8% sequentially to 776k above the Street’s estimate of a 3.6% rise to 700k. On a YoY basis, June rose 6.9% following May’s 13.7% rise and April’s 14.0% fall. New home inventory fell 1.3% to 307k, down 7% YoY. Jefferies and Goldman Sachs increased their price target on Amazon.com Inc. (AMZN) to $3,800 up from $3,100 and $3,000, respectively, upside of 26%.
Exhibit 2: Significant Contributors to Performance, 7/17/20 - 7/24/20
| Name | Type | Return |
| Peloton Interactive Inc. | Equity | 5.6% |
| OneMain Holdings Inc. | Equity | 5.0% |
| Bank of America Corp. | Equity | 4.9% |
| Taylor Morrison Home Corp. | Equity | 2.8% |
| Amazon.com Inc. | Equity | 1.6% |
Source: Miller Value Partners
Stitch Fix Inc. (SFIX) crossed below the 50-day moving average as Goldman Sachs raised their price target on the name to $34 up from $29, 45% upside. Teva Pharmaceuticals (TEVA) crossed below the 50-day moving average. Facebook Inc. (FB) crossed below the 50-day moving average. Credit Suisse raised their price target on the name to $305 up from $258, upside of 32%. Bausch Health Companies Inc. (BHC) crossed below the 100-day moving average. A US appeals court decided that a decision made in April that gave Mylan a second opportunity to invalidate a patent on Relistor will stand.
Exhibit 3: Significant Detractors from Performance, 7/17/20 - 7/24/20
| Name | Type | Return |
| Stitch Fix Inc. | Equity | -11.5% |
| Teva Pharmaceuticals | Equity | -7.0% |
| *New Security* | Equity | -9.2% |
| Facebook Inc. | Equity | -4.7% |
| Bausch Health Companies Inc. | Equity | -5.6% |
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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