Last week, the Opportunity Equity strategy lost -2.07%, underperforming the S&P 500’s -1.21% loss (Exhibit 1). The strategy ended the week up 15.02% YTD, or 504 basis points behind the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 7/19/191
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (7/12 - 7/19) | -2.07% | -1.21% |
| MTD | -0.07% | 1.29% |
| QTD | -0.07% | 1.29% |
| YTD | 15.02% | 20.06% |
| Inception (annualized since 6/26/00) | 6.79% | 5.88% |
Source: Bloomberg, Miller Value Partners
Eventbrite Inc. (EB) crossed above the 50-day moving average. United Airlines Holdings Inc. (UAL) gained over the week after reporting strong 2Q results and increasing full year guidance. The company reported adjusted EPS of $4.21 ahead of consensus of $4.12 driven by higher than expected passenger revenue per available seat mile (PRASM) of 2.5%. The company increased full year EPS guidance to $10.50-12.00 up from $10-12 previously with 3Q PRASM guidance of +0.5%-+2.5%. The board approved a new $3B share repurchase program. Micron Technology (MU) gained over the week as UBS raised their price target to $47 from $37, 3% upside, citing more moderate NAND pricing declines partially driven by the Toshiba/WDC JV shutdown. There was minimal news on RH (RH) and Avon Products Inc. (AVP).
Exhibit 2: Significant Contributors to Performance, 7/12/19 - 7/19/19
| Name | Type | Return |
| Eventbrite Inc. | Equity | 6.8% |
| United Airlines Holding Inc. | Equity | 2.9% |
| RH | Equity | 2.1% |
| Micron Technology | Equity | 2.3% |
| Avon Products Inc. | Equity | 2.0% |
Source: Miller Value Partners
Endo International plc (ENDP), Teva Pharmaceuticals (TEVA), and Malllinckrodt plc (MNK) all fell over the week as fears of opioid liabilities increased. The companies faced a wave of downgrades as ARCOS Data Published in the Washington Post showed MNK, TEVA, and ENDP were responsible for manufacturing 88% of opioids from 2006-2012. Mallinckrodt announced the pay down of $300m worth of debt during 2Q while disclosing it drew $400m on its RCF post quarter-end. The company halted its Phase 2b trial of Acthar gel in ALS patients due to higher rates of pneumonia. The company also announced a collaboration agreement with Silence Therapeutics which will include a $20M upfront payment along with a $5m equity investment and a non-executive director seat. Facebook Inc. (FB) declined over the week. It was reported that the FTC had voted to approve a ~$5B fine against FB following a review of its user privacy practices. The Senate held a hearing on Facebook’s proposed Libra cryptocurrency with Facebook’s David Marcus, head of the Libra project, speaking to Congress. There was minimal news on Genworth Financial Inc. (GNW).
Exhibit 3: Significant Detractors from Performance, 7/12/19 - 7/19/19
| Name | Type | Return |
| Endo International plc | Equity | -20.2% |
| Teva Pharmaceuticals | Equity | -14.5% |
| Mallinckrodt plc | Equity | -19.4% |
| Facebook Inc. | Equity | -3.2% |
| Genworth Financial Inc. | Equity | -4.1% |
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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