Last week, the Opportunity Equity strategy gained 1.85%, outperforming the S&P 500’s 1.21% gain (Exhibit 1). The strategy ended the week up 23.16% YTD, or 1298 basis points ahead of the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 9/14/181
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (9/7 - 9/14) | 1.85% | 1.21% |
| MTD | -2.39% | 0.22% |
| QTD | 10.76% | 7.33% |
| YTD | 23.16% | 10.18% |
| Inception (annualized since 6/26/00) | 8.11% | 5.92% |
Source: Bloomberg, Miller Value Partners
RH (RH) crossed above the 100-day moving average as CEO Gary Friedman bought $1M of RH stock. Discovery Inc. (DISCA) was up over the week as DISCA announced a deal with Hulu Live and SlingTV. Bausch Health Companies Inc. (BHC) gained over the week as the company announced that it had settled with Teva to delay the generic launch of Xifaxan until 2028 which pushes major competition further back than consensus expected in 2024. Stitch Fix Inc. (SFIX) gained over the week as KeyBanc analysts raised its price target to $53, up from $38, upside of 7%. Pandora Media Inc. (P) rose over the week as Needham raised its price target to $13, upside of 36%.
Exhibit 2: Significant Contributors to Performance, 9/7/18 - 9/14/18
| Name | Type | Return |
| RH | Equity | 8.4% |
| Discovery Inc. | Equity | 15.1% |
| Bausch Health Companies Inc. | Equity | 8.3% |
| Stitch Fix Inc. | Equity | 10.2% |
| Pandora Media Inc. | Equity | 8.1% |
Source: Miller Value Partners
Mallinckrodt (MNK) was downgraded to sell from neutral at Goldman with a price target of $28, downside of 8%. The company was also initiated with a sell rating at Berenberg with a price target of $25, downside of 18%. OneMain Holdings Inc. (OMF) fell below the 50-day moving average. Flexion Therapeutics (FLXN) announced that the Zilretta study had met its primary endpoints in patients with osteoarthritis knee pain and Type 2 diabetes. Celgene Corp. (CELG) crossed below the 50-day moving average after Bristol-Myers Squibb presented Phase II psoriasis data. The drug achieved scores that compared favorably to Celgene’s Otezla. There was minimal news on ADT Inc. (ADT).
Exhibit 3: Significant Detractors from Performance, 9/7/18 - 9/14/18
| Name | Type | Return |
| Mallinckrodt | Equity | -7.6% |
| OneMain Holdings Inc. | Equity | -3.0% |
| Flexion Therapeutics | Equity | -5.4% |
| Celgene Corp. | Equity | -3.6% |
| ADT Inc. | Equity | -2.7% |
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.
©2018 Miller Value Partners, LLC
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