Last week, Opportunity Equity strategy increased 3.26%, outperforming the S&P 500’s 1.25% gain (Exhibit 1). The strategy ended the week up 24.42% YTD, or 875 basis points ahead of the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 10/6/171
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (9/29 - 10/6) | 3.26% | 1.25% |
| MTD | 3.26% | 1.25% |
| QTD | 3.26% | 1.25% |
| YTD | 24.42% | 15.67% |
| Inception (annualized since 12/30/99) | 7.08% | 5.19% |
Source: Bloomberg, Miller Value Partners
Quotient Technology Inc. (QUOT) was raised to buy at Dougherty & Company LLC with a price target of $20, upside of 15%. A Guggenheim analyst raised the price target for RH (RH) to $90 from $75, upside of 18%. Flexion Therapeutics (FLXN) received approval from the FDA for Zilretta which is used to treat OA knee pain. The label included data highlighting its safety in diabetic patients and a 6-week room temperature stability rating which many analysts were not expecting. The company plans to start sales in October with a full commercial launch in mid-November. American Airlines Group Inc. (AAL) crossed above the 100-day moving average and Delta Air Lines Inc. (DAL) crossed above the 50, 100, and 200-day moving average as Delta announced September sales data which showed an increase in pricing power despite three major hurricanes and a continuing fare war. RPM rose 2% YoY through the third quarter.
Exhibit 2: Significant Contributors to Performance, 9/29/17 – 10/6/17
| Name | Type | Return |
| Quotient Technology Inc. | Equity | 11.2% |
| RH | Equity | 8.7% |
| Flexion Therapeutics | Equity | 23.8% |
| American Airlines Group Inc. | Equity | 8.0% |
| Delta Air Lines Inc. | Equity | 7.9% |
Source: Miller Value Partners
Genworth Financial Inc. (GNW) sold off at the beginning of the week after Genworth and China Oceanwide announced that they would be refiling their application with the Committee on Foreign Investment in the United States (CFIUS) with the new filing to include additional mitigation approaches. The stock rebounded later in the week crossing back above the 50 and 100-day moving average as fear of termination diminished but still ended the week below the 200-day moving average. GameStop Corp. (GME) ended the week below the 50-day moving average as Goldman Sachs credit analyst initiated on the debt with an in-line rating.
Exhibit 3: Significant Detractors from Performance, 9/29/17 - 10/6/17
| Name | Type | Return |
| Genworth Financial Inc. | Equity | -9.6% |
| *Recently Added Security* | Equity | -4.3% |
| *Recently Added Security* | Equity | -2.6% |
| GameStop Corp. | Equity | -6.4% |
| *Recently Added Security* | Equity | -6.3% |
1The performance figures reflect the deduction of a model investment management fee of 1% (the highest fee for separate accounts under our fee schedule) 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.
©2017 Miller Value Partners, LLC
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