Last week, the Opportunity Equity fell by -1.07%, outperforming the S&P 500’s -2.49% loss (Exhibit 1). The strategy ended the week up 5.30% YTD, 50 basis points ahead of the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 9/11/201
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (9/4 - 9/11) | -1.07% | -2.49% |
| MTD | -2.79% | -4.50% |
| QTD | 16.85% | 8.13% |
| YTD | 5.30% | 4.80% |
| Inception (annualized since 6/26/00) | 7.48% | 6.26% |
Source: Bloomberg, Miller Value Partners
RBC reiterated their outperform rating on ADT Inc. (ADT) with a price target of $16, upside of 51% calling the Google partnership a game-changer. RH (RH) gained 20.5% on stronger than expected 2nd quarter earnings. Revenue was $709.28mm ahead of consensus numbers of $700.79mm. Operating margin of 19.25% far outstripped consensus of 16.67%, resulting in non-GAAP EPS of $4.90 instead of $3.41 expected. The company raised guidance as well, with revenue now estimated between $2.680bn and $2.694bn vs previous of estimates of $2.658bn to $2.674bn, resulting in EPS guidance between $10.53 and $10.76 for this year, ahead of previous guidance between $9.08 and $9.52. There were a number of price target increases, including Telsey raising their price target to $450 from $345 (upside of 18%), Guggenheim raising their price target to $500 (upside of 31%) from $300, Cowen moving up to $370 (downside of 3.0%) from $280, and Barclays $446 (upside of 16.9%) from $300, among others. Taylor Morrison Home Corp (TMHC) crossed above its 50-day moving average. Medifast Inc. (MED) crossed back above the 50-day moving average as they declared and maintained their quarterly $1.13 dividend.
Exhibit 2: Significant Contributors to Performance, 9/4/20 - 9/11/20
| Name | Type | Return |
| *New Security* | Derivative | 20.4% |
| ADT Inc. | Equity | 6.4% |
| RH | Equity | 20.5% |
| Taylor Morrison Home Corp | Equity | 8.1% |
| Medifast Inc | Equity | 10.8% |
Source: Miller Value Partners
Amazon.com Inc. (AMZN) crossed below its 50-day moving average on limited news. Vroom Inc. (VRM) was down 11.8% as they completed a follow-on equity offering of 10.8mm shares that they priced at $54.50 each. The company also moved up their third quarter guidance, raising revenue estimates to $290mm to $310mm from $268mm to $290mm prior, and gross profit from $16-$18mm up to $21 to $23mm. DXC Technology Company. (DXC) fell 5.3% while announcing two new additions to the Board of Directors. There was limited news on Facebook Inc. (FB) and Tivity Health Inc. (TVTY).
Exhibit 3: Significant Detractors from Performance, 9/4/20 - 9/11/20
| Name | Type | Return |
| Amazon.com Inc. | Equity | -5.4% |
| Facebook Inc. | Equity | -5.7% |
| Vroom, Inc | Equity | -11.8% |
| Tivity Health Inc | Equity | -8.8% |
| DXC Technology Company | Equity | -5.3% |
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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