Last week, the Opportunity Equity strategy gained 2.33%, outperforming the S&P 500’s 0.93% rise (Exhibit 1). The strategy ended the week up 22.58% YTD, or 422 basis points ahead of the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 11/24/171
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (11/17 - 11/24) | 2.33% | 0.93% |
| MTD | 1.27% | 1.24% |
| QTD | 1.73% | 3.61% |
| YTD | 22.58% | 18.36% |
| Inception (annualized since 12/30/99) | 6.94% | 5.28% |
Source: Bloomberg, Miller Value Partners
Flexion Therapeutics (FLXN) crossed above the 50 and 100-day moving average after announcing the full US commercial launch of Zilretta at a wholesale acquisition cost of $570 per dose. Amazon.com Inc. (AMZN) rose over the week heading into Black Friday while CNBC reported on a potential deal between Amazon and Cerner, one of the world’s largest health technology companies. Pulte Group Inc. (PHM) was up over the week as October existing home sales rose 2% above expectations of 0.2%. There was minimal news on the other top contributors.
Exhibit 2: Significant Contributors to Performance, 11/17/17 – 11/24/17
| Name | Type | Return |
| Valeant Pharmaceuticals International Inc. | Equity | 12.8% |
| Flexion Therapeutics | Equity | 11.7% |
| Amazon.com Inc. | Equity | 4.9% |
| Endurance International Group Holdings | Equity | 5.6% |
| Pulte Group Inc. | Equity | 2.8% |
Source: Miller Value Partners
Cowen analyst, Oliver Chen, raised his price target for RH (RH) to $115 up from $61 previously, implying an upside of 16%. Mallinckrodt plc (MNK) was downgraded to market perform at Oppenheimer citing lack of growth visibility in Acthar. Susquehanna raised its price target for Foot Locker Inc. (FL) to $50 up from $37, implying an upside of 25%. There was minimal news on the other top detractors.
Exhibit 3: Significant Detractors from Performance, 11/17/17 - 11/24/17
| Name | Type | Return |
| RH | Equity | -3.0% |
| Mallinckrodt plc | Equity | -5.2% |
| OneMain Holding Inc. | Equity | -1.4% |
| Alexion Pharmaceuticals | Equity | -2.0% |
| Foot Locker Inc. | Equity | -1.8% |
Source: Miller Value Partners
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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