Last week, the Opportunity Equity strategy gained 2.58%, outperforming the S&P 500’s gain of 0.53% (Exhibit 1). The strategy ended the week up 10.41% YTD, or 588 basis points behind the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 6/14/191
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (6/7 - 6/14) | 2.58% | 0.53% |
| MTD | 7.34% | 5.01% |
| QTD | -2.93% | 2.32% |
| YTD | 10.41% | 16.29% |
| Inception (annualized since 6/26/00) | 6.59% | 5.73% |
Source: Bloomberg, Miller Value Partners
RH (RH) crossed above the 50-day moving average after announcing earnings which beat expectations and raised its full year guidance. RH reported sales of $598.8M ahead of consensus of $584M leading to EPS of $1.85 vs. $1.54 expected and guidance of $1.47-1.58. The company raised its 2019 revenue guidance to $2.642-2.662B up from $2.585-2.635B previously and EPS guidance to $8.76-9.27 up from $8.05-8.69. The company also increased 2Q EPS guidance to $2.33-2.47 ahead of the Street at $2.17. Ziopharm Oncology Inc. (ZIOP) crossed above the 50-day moving average. The company announced that the FDA had cleared the commencement of a Phase I trial evaluating SB-TCR-T cell therapy in solid tumor. The trial will be conducted by the National Cancer Institute (NCI) as part of a cooperative research and development agreement with ZIOP. Intrexon Corp. (XON) crossed above the 100-day moving average. CEO, RJ Kirk, purchased another 805k shares totaling $4.2M. ADT Inc. (ADT) crossed above the 50-day moving average.
Exhibit 2: Significant Contributors to Performance, 6/7/19 - 6/14/19
| Name | Type | Return |
| RH | Equity | 25.2% |
| Ziopharm Oncology Inc | Equity | 24.9% |
| Intrexon Corp | Equity | 29.7% |
| ADT Inc | Equity | 5.3% |
| Ziopharm Oncology Restricted Warrant | Derivative | 34.3% |
Source: Miller Value Partners
Pharma names continued to decline on fears of opioid litigation. Teva Pharmaceuticals (TEVA) declined after the Oklahoma Judge Thad Balkman declined to approve the state’s $85m opioid settlement with Teva. He ordered the attorneys to file additional paperwork before he would approve the settlement. Flexion Therapeutics (FLXN) crossed below the 50-day moving average. Micron Technology (MU) declined as analysts began to question the plausibility of a 2H recovery in semis. UBS maintained its buy rating on the stock but lowered the price target to $37 from $41, 13% upside while Bank of America’s analysts lowered their price target to $43 from $50, 32% upside. There was minimal news on Endo International (ENDP) and Genworth Financial Inc. (GNW).
Exhibit 3: Significant Detractors from Performance, 6/7/19 - 6/14/19
| Name | Type | Return |
| Endo International plc | Equity | -17.2% |
| Teva Pharmaceutical | Equity | -11.0% |
| Flexion Therapeutics | Equity | -7.4% |
| Genworth Financial Inc | Equity | -4.4% |
| Micron Technology | Equity | -3.9% |
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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