Last week, the Opportunity Equity strategy gained 0.69%, matching the S&P 500’s 0.69% gain (Exhibit 1). The strategy ended the week up 6.48% YTD, or 82 basis points ahead of the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 8/14/201
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (8/7 - 8/14) | 0.69% | 0.69% |
| MTD | 7.64% | 3.20% |
| QTD | 18.15% | 9.02% |
| YTD | 6.48% | 5.66% |
| Inception (annualized since 6/26/00) | 7.57% | 6.33% |
Source: Bloomberg, Miller Value Partners
Farfetch Ltd. (FTCH) gained over the week after reporting 2Q results, which beat expectations and provided 3Q guidance that was above expectations. The company reported Digital Platform Gross Merchandise Values (GMV) grew +34% above prior guidance of 25-30% and consensus for +26%. The company added ~500k new customers, growing its active customer base by 42%. The company had lower promotional spend leading to order contribution margins increasing to 35% with EBITDA loss beating at -$25M vs. -$30m expected. The company reiterated EBITDA profitability in 2021. The company guided for 3Q digital platform GMV growth of 40-45% (+30% consensus) with order contribution margins of 32-35% (consensus 31%) leading to EBITDA of -$25M to -$20M (consensus of -$34M). There was minimal news on the other names.
Exhibit 2: Significant Contributors to Performance, 8/7/20 - 8/14/20
| Name | Type | Return |
| Farfetch Ltd | Equity | 4.9% |
| Taylor Morrison Home Corp. | Equity | 4.9% |
| The Chemours Co. | Equity | 6.7% |
| Stitch Fix Inc. | Equity | 6.2% |
| Tivity Health Inc. | Equity | 5.8% |
Source: Miller Value Partners
RBC raised their price target for ADT Inc. (ADT) to $16 from $10, upside of 36%, while maintaining their outperform rating while Citi lowers their price target to $13.50 from $15.00, upside of 15%, while keeping their neutral rating. Ziopharm Oncology Inc. (ZIOP) fell below the 50-day and 100-day moving average. The company reported 2Q results, which showed the company continues to make progress on its pipeline. The company reported a net loss of -$18.6M vs expectations of -$19.5M ending the quarter with $153m in cash on hand which should support its operations through mid-2022. Vroom Inc. (VRM) announced 2Q results which revenue of $253M vs $219M expected or EBITDA of -$39M ahead of expected -$50.6M and EPS of -$0.34 vs -$0.73. Vehicle Gross Profit per unit declined due to price action taken at the beginning of the quarter but they expect it to rebound in 3Q to $1,600 to $1,700. The company is guiding for 3Q revenue of $268-290M vs expectations of $335M with total gross profit of $16-18M vs $14.4M modeled and net loss per share of -$0.42 to -$0.37 vs. -$0.36 expected. Precigen Inc. (PGEN) crossed below the 50-day moving average. The company reported 2Q20 results in-line consensus. The company ended the quarter with $133M in cash, which is expected to fund operations in late 2021. Precigen announced an important advancement in its Ultra CAR-T platform with its UltraPorator technology. UltraPorator consists of proprietary hardware, software, and consumables for a self-contained system for non-viral genetic modification of a patient’s T-cells. This technology has been cleared by the FDA for use in current UltraCAR trials and is being technology transferred to clinical sites. Teva Pharmaceuticals (TEVA) reported 2Q results with total revenue of $3.87B below consensus of $4.024B but reiterated 2020 company guidance of $16.6-17B (consensus of $17.041B). The company reported 2Q Adjusted EBITDA of $1.108B vs $1.099B expected and reiterated 2020 Adjusted EBITDA of $4.5-4.9B ($4.637B consensus) and adjusted EPS of $2.30-2.55 ($2.53 consensus) and Free Cash Flow of $1.8-2.2B.
Exhibit 3: Significant Detractors from Performance, 8/7/20 - 8/14/20
| Name | Type | Return |
| ADT Inc. | Equity | -3.4% |
| Ziopharm Oncology Inc. | Equity | -11.1% |
| Vroom Inc. | Equity | -8.6% |
| Precigen Inc. | Equity | -8.8% |
| Teva Pharmaceuticals | Equity | -3.5% |
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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