Last week, the Opportunity Equity strategy increased 5.65%, outperforming the S&P 500’s 1.54% gain. (Exhibit 1). The strategy ended the week up 9.83% YTD, 1,137 basis points behind the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 8/27/211
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (8/20 - 8/27) | 5.65% | 1.54% |
| MTD | -3.88% | 2.72% |
| QTD | -9.63% | 5.16% |
| YTD | 9.83% | 21.20% |
| Inception (annualized since 6/26/00) | 9.02% | 7.55% |
Source: Bloomberg, Miller Value Partners
Norwegian Cruise Line Holdings Ltd. (NCLH) rose on news that the FDA approved the Pfizer Covid-19 vaccine, potentially leading to an increase in vaccination rates and cruising demand. This counteracted the negative impact of the CDC advising at risk people not to cruise even if they are vaccinated. Diamondback Energy Inc. (FANG) rose through the 200-day moving average as Morningstar increased their fair value estimate of the stock from $88 to $119 (upside of 55.3%), and raised the company back to a four star rating (up from three stars) while Morgan Stanley trimmed their target from $114 to $111 (upside of 44.8%). Splunk Inc. (SPLK) rose through the 200-day moving average as the company announced their 2Q22 results that beat on both the top and bottom line. The company reported revenue of $606mm above estimates of $563mm, while annual recurring revenue (ARR) came in at $2.63bn ahead of consensus of $2.61bn. Non-GAAP operating margins came in at -20% vs consensus of -25% leading to EPS of -$0.62 vs -$0.69 expected. The company provided full year guidance expecting revenue of $2.53-$2.6bn for the year beating consensus of $2.54bn and non-GAAP operating margins of (14%) to (17%) missing consensus of (12%) while cash flow from operations beat expectations at $100mm vs $62mm expected. JMP Securities increased their price target from $160 to $175 (upside of 12.9%), while BMO increased their target from $148 to $177 (upside of 14.1%), and RBC increased their target from $200 to $210 (upside of 35.4%), among others. Matterport Inc. (MTTR) rose through the 50-day moving average after Credit Suisse initiated on the name with a buy rating and a price target of $20 (upside of 34.0%). The company announced a beta version of its Notes collaboration tool, a conversational, real-time team collaboration, communication and file sharing tool inside the Matterport digital twin. DXC Technology (DXC) rose as Susquehanna upgraded the stock from neutral to positive with a price target of $42 (upside of 12.5%), up from $40.
Exhibit 2: Significant Contributors to Performance, 8/20/21 - 8/27/21
| Name | Type | Return |
| Norwegian Cruise Line Holdings Ltd. | Equity | 10.7% |
| Diamondback Energy Inc. | Equity | 12.4% |
| Splunk Inc. | Equity | 7.4% |
| Matterport Inc. | Equity | 12.5% |
| DXC Technology Company | Equity | 5.4% |
Source: Miller Value Partners
Grayscale Bitcoin Trust (GBTC) dropped as Bitcoin failed to maintain momentum after pushing through $50,000 level early in the week. News broke that Citi is considering bitcoin futures trading for some institutional clients while MicroStrategy purchased another $177mm in coins. Metromile Inc. (MILE) announced an integration with Verisk’s LightSpeed Auto platform to simplify the consumer buying experience, increase speed to bind and conversion rates and lower acquisition costs. There was limited news on Pangaea One, L.P. and SoFi Technologies, Inc. (SOFI).
Exhibit 3: Significant Detractors from Performance, 8/20/21 - 8/27/21
| Name | Type | Return |
| Grayscale Bitcoin Trust | Currency | -1.1% |
| Metromile Inc. | Equity | -1.7% |
| Pangea One, L.P. | Equity | -0.1% |
| Cash | Currency | 0.0% |
| SoFi Technologies, Inc. | Equity | 0.0% |
-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.
©2021 Miller Value Partners, LLC
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