Last week, the Opportunity Equity strategy strategy gained 1.16%, underperforming the S&P 500’s 1.53% gain (Exhibit 1). The strategy ended the week up 8.08% YTD, or 92 basis points ahead of the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Versus Equity Indices, Through 4/28/171
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (4/21 - 4/28) | 1.16% | 1.53% |
| MTD | 0.60% | 1.03% |
| QTD | 0.60% | 1.03% |
| YTD | 8.08% | 7.16% |
| Inception (annualized since 12/30/99) | 6.40% | 4.86% |
Source: Bloomberg, Miller Value Partners
Endo Pharmaceuticals Holdings Inc. (ENDP) crossed above the 50-day moving average after a drug it markets for Adamas Pharmaceuticals was shown in two Phase 3 trials to have a statistically significant reduction in complications from Parkinson’s disease. Alexion Pharmaceuticals (ALXN) crossed above the 50-day, 100-day and 200-day moving average after announcing first quarter results which beat estimates and increasing 2017 guidance. The company has first quarter sales of $870M versus consensus of $831M and EPS of $1.38 versus consensus of $1.24. The company maintained revenue guidance but increased 2017 EPS guidance to $5.10-$5.30 from $5.00-$5.25. Valeant Pharmaceuticals International Inc. (VRX) rose over the week after Bausch + Lomb received approval to sell Vitesse. JPMorgan Chase & Co (JPM) crossed above the 100-day moving average as Guggenheim raised the stock to a buy with a price target of $96 (10% upside) and Vining Sparks upgraded the stock to a market outperform with a price target of $95 (upside of 9%). There was minimal news on Platform Specialty Products Corp. (PAH).
Exhibit 2: Significant Contributors to Performance, 4/21/17 - 4/28/17
| Name | Type | Return |
| Platform Specialty Products Corp. | Equity | 6.1% |
| Endo Pharmaceuticals Holdings | Equity | 10.4% |
| Alexion Pharmaceuticals | Equity | 9.4% |
| Valeant Pharmaceuticals International | Equity | 8.7% |
| JPMorgan Chase & Co - Warrants | Derivative | 5.5% |
Source: Miller Value Partners
American Airlines Group Inc. (AAL) fell below the 50-day moving average after unexpectedly increasing the pay for its flight attendants and pilots to the equivalent highest level at either Delta or United. American announced first quarter results which beat expectations with EPS of $0.63 compared to consensus of $0.57 but down 51% from a year ago and announced 2Q TRASM up 3%-5%. Seagate Technology (STX) fell below the 50-day and 100-day moving average after reporting fairly in-line third quarter results but disappointing on fourth quarter guidance. The company report revenue of $2.67B versus consensus of $2.71B and EPS of $1.10 versus consensus of $1.07. Seagate guided for fourth quarter sale of $2.5-2.6B compared to consensus of $2.68B. athenahealth Inc. (ATHN) fell below the 50-day, 100-day and 200-day moving average after a sharp reduction in 2017 guidance. The company reported firsts quarter results that missed with Revenue of $285.3M (consensus $296.9M) and EPS of $0.32 (consensus $0.46). The company revised annual guidance, with revenue of $1.21-1.25B from $1.29-1.33B and operating income of $120-140M from $170-190M. A number of sell-side analysts lowered their price targets on the stock. Lennar Corp. (LEN) fell below the 50-day moving average. There was minimal news on OneMain Holdings Inc. (OMF).
Exhibit 3: Significant Detractors from Performance, 4/21/17 - 4/28/17
| Name | Type | Return |
| American Airlines Group | Equity | -5.6% |
| Seagate Technology | Equity | -12.7% |
| athenahealth Inc. | Equity | -15.3% |
| OneMain Holdings Inc. | Equity | -3.2% |
| Lennar Corp. | Equity | -2.8% |
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
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