Last week, the Opportunity Equity strategy fell by -1.39%, underperforming the S&P 500’s -0.60% loss (Exhibit 1). The strategy ended the week up 3.84% YTD, 33 basis points behind the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 9/18/201
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (9/11 - 9/18) | -1.39% | -0.60% |
| MTD | -4.13% | -5.08% |
| QTD | 15.23% | 7.48% |
| YTD | 3.84% | 4.17% |
| Inception (annualized since 6/26/00) | 7.40% | 6.22% |
Source: Bloomberg, Miller Value Partners
Canada Goose Holdings. (GOOS) crossed above the 200-day moving average as UBS noted that the potential for the company in China is underappreciated by the market. Bausch Health Companies Inc (BHC) provided and update on their business, showing signs of recovery as US vision is up 8% YoY vs. -33% in Q2. Xifaxan scripts also are returning to growth (+5% YoY in Q3). The company announced that they will be targeting 4x leverage for the new Bausch and Lomb company they are spinning out, and 5.5x leverage for the remaining business. Teva Pharmaceutical (TEVA) gained after announcing results from the 52-week, multicenter, randomized, double-blind parallel group study evaluating monthly or quarterly AJOVY injection in adults with chronic migraine or episodic migraine. A number of analysts changed their rating on Stitch Fix. (SFIX) ahead of earnings this week. Telsey raised their price target to $33 from $29, upside of 16.4% while Needham upgraded the stock to a Buy with a price target of $36, upside of 27%. MKM partners initiated on the stock with a neutral rating and a price target of $25, -12% downside. Ziopharm Oncology Inc. (ZIOP) reported that their IL-12 target glioma was given a Rare Pediatric Disease designation from the FDA. The news means that ZIOP could be granted priority review voucher as the program progresses, saving them money and helping them accelerate clinical trials down the line.
Exhibit 2: Significant Contributors to Performance, 9/11/20 - 9/18/20
| Name | Type | Return |
| Canada Goose Holdings | Equity | 14.2% |
| Bausch Health Companies Inc. | Equity | 11.6% |
| Teva Pharmaceutical | Equity | 7.9% |
| Stitch Fix | Equity | 5.2% |
| Ziopharm Oncology Inc. | Equity | 11.3% |
Source: Miller Value Partners
ADT Inc. (ADT) crossed below its 50-day moving average after they announced a secondary offering where Apollo Global Management and some executives sold shares representing 5.5% of the company. Farfetch Ltd. (FTCH) crossed below its 50-day moving average on limited news. Amazon.com Inc. (AMZN fell despite a report from RBC arguing that their logistics network is being undervalued by investors and reiterating their buy rating $3800 price target (Upside of 28.6%). Facebook Inc. (FB) crossed below 50-day moving average as Dow Jones reported that the Federal Trade Commission is preparing to bring an antitrust suit against Facebook before the end of the year. The suit is said to be about whether Facebook is keeping competition at bay by acquiring any potential competitor. Morgan Stanley raised their price target on FB to $295 up from $285, upside of 17%. Citigroup Inc. (C) dropped 12% after announcing disappointing guidance at an investor conference. The company noted that additional reserve builds are expected in 3Q20 noting that the current economic outlook is weaker than what was expected in June. This was followed by news that Federal regulators are preparing to rebuke the company for failing to improve their risk management systems and comes on the heels of CEO Michael Corbat announcing last week his intention to retire in February.
Exhibit 3: Significant Detractors from Performance, 9/11/20 - 9/18/20
| Name | Type | Return |
| ADT Inc. | Equity | -20.1% |
| Farfetch Ltd | Equity | -5.8% |
| Amazon.com Inc. | Equity | -5.2% |
| Facebook Inc. | Equity | -5.3% |
| Citigroup Inc. | Equity | -12.0% |
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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