Last week, the Opportunity Equity strategy was off -0.36%, while the S&P 500 posted a 0.77% gain (Exhibit 1). The strategy ended the week up 6.10% YTD, 37 basis points behind the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 8/21/201
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (8/14 - 8/21) | -0.36% | 0.77% |
| MTD | 7.26% | 3.99% |
| QTD | 17.73% | 9.85% |
| YTD | 6.10% | 6.47% |
| Inception (annualized since 6/26/00) | 7.54% | 6.36% |
Source: Bloomberg, Miller Value Partners
Precigen Inc. (PGEN) posted a strong 36.9% return on the week, lifted by the announcement that they have begun dosing a Phase I/II trial of their potential immunotherapy treatment to treat solid tumors deriving from Human Papillomavirus (HPV).The therapy is designed to activate the patients’ immune system to combat cancerous tumors. The stock also crossed above the 50-day moving average. Farfetch Ltd. (FTCH) continued to benefit from strong earnings last week. China Renaissance raised their price target on FTCH to $35, up from $33, upside of 19%. Amazon.com Inc. (AMZN) confirmed its plans to expand its offices in 6 US cities including NYC, hiring 3,500 additional people. Taylor Morrison Home Corp. (TMHC) and Lennar Corp. (LEN) gained over the week after July total housing starts rose 22.6% sequentially to 1,496k above the Street’s expectations for a 5% rise to 1,245k with single-family starts rising 7.4% YoY. July total building permits rose 18.8% sequentially to 1,495k ahead of the Street’s expectations for a 6.8% rise to 1,326k with single-family permits rising 15.5% YoY. The NAHB survey of homebuilder confidence also rose to 78, matching the highest total in the history of the series, further lending credence to a housing rally.
Exhibit 2: Significant Contributors to Performance, 8/14/20 - 8/21/20
| Name | Type | Return |
| Precigen Inc | Equity | 36.9% |
| Farfetch Ltd. | Equity | 2.6% |
| Amazon.com Inc. | Equity | 4.4% |
| Taylor Morrison Home Corp. | Equity | 5.8% |
| Lennar Corp. | Equity | 6.9% |
Source: Miller Value Partners
Teva Phamaceuticals (TEVA) declined 14%, after the US Department of Justice alleged in a lawsuit that TEVA provided illegal copays from 2006-2015 on a drug to treat MS. The allegation is $300mm of false claims which TEVA would be liable for 3x that in potential damages if they were to lose in court. While the lawsuit will not be sorted out in the near term, it adds to the legal overhang on the name. TEVA crossed below the 100 and 200-day moving average. JPMorgan raised their price target on DXC Technology Company (DXC) from $19 to $22, upside of 18%. Capital One Financial Corp. (COF) crossed below its 50-day moving average, despite reporting strong July credit performance. The company report July domestic card loans down 5% YoY to $98.2B with delinquencies down 105bps to 2.44% with Net Charge-offs down 43bps to 3.82%. The company showed strong auto loans growing 10% YoY to $64.3B. Bausch Health Companies Inc. (BHC) fell as investors continued to mull over their plan to split into two different entities. Piper Sandler lowered their price target on the name to $26 from $32, upside of 59%. There was minimal news on ADT Inc. (ADT).
Exhibit 3: Significant Detractors from Performance, 8/14/20 - 8/21/20
| Name | Type | Return |
| Teva Pharmaceuticals | Equity | -14.0% |
| DXC Technology Company | Equity | -8.5% |
| ADT Inc. | Equity | -2.8% |
| Capital One Financial Corp. | Equity | -8.2% |
| Bausch Health Companies Inc. | Equity | -6.2% |
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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