Last week, Opportunity Equity strategy lost -0.98%, underperforming the S&P 500’s 1.01% rise (Exhibit 1). The strategy ended the week up 13.61% YTD, or 370 basis points ahead of the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 6/2/171
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (5/26 – 6/2) | -0.98% | 1.01% |
| MTD | 0.99% | 1.14% |
| QTD | 5.75% | 3.62% |
| YTD | 13.61% | 9.91% |
| Inception (annualized since 12/30/1999) | 6.67% | 4.99% |
Source: Bloomberg, Miller Value Partners
Wayfair Inc. (W) was raised to outperform at Oppenheimer with a price target of $80, 17% upside. Quotient Technology Inc. (QUOT) crossed above the 200-day moving average and Pulte Group Inc. (PHM) crossed above the 50-day moving average. Apple Inc. (AAPL) increased over the week as investor look forward to the WWDC conference happening June 5-9th in San Jose. Endurance International Group Holdings (EIGI) crossed above the 100-day moving average.
Exhibit 2: Significant Contributors to Performance, 5/26/17 – 6/2/17
| Name | Type | Return |
| Wayfair Inc. | Equity | 4.9% |
| Quotient Technology Inc. | Equity | 5.0% |
| Pulte Group Inc. | Equity | 3.8% |
| Apple Inc. C100 1/18 | Derivative | 3.2% |
| Endurance International Group Holdings | Equity | 4.6% |
Source: Miller Value Partners
RH (RH) fell below the 50-day moving average after announcing first quarter results that were in-line with their pre-announcement in May but disappointing fiscal year guidance, lowering earnings expectations but increasing revenue (adj EPS of $1.67-$1.94 versus previous guidance of $1.78-$2.19 and Revenue of $2.4B-$2.45B versus previous guidance of $2.3B-$2.4B). JPMorgan Chase & Co (JPM/WS) and Bank of America Corp (BAC) were lower after Marianne Lake, CFO of JPMorgan, said at the Deutsche Bank conference that market revenue is down 15% so far in the second quarter from a year earlier and Bank of America CEO, Brian Moynihan, stated at the Bernstein conference that second quarter trading revenue would decline YoY. The decline is attributed to the lower volatility in 2017 than last year. Ziopharm Oncology Inc. (ZIOP) fell below the 200-day moving average. HC Wainwright & Co LLC initiated coverage on ZIOP with a buy recommendation and a price target of $9.50, 58% upside. There was minimal news on Valeant Pharmaceuticals International Inc. (VRX).
Exhibit 3: Significant Detractors from Performance, 5/26/17 – 6/2/17
| Name | Type | Return |
| RH | Equity | -26.4% |
| JPMorgan Chase & Co - Warrants | Derivative | -6.4% |
| Bank of America Corp | Equity | -3.1% |
| Valeant Pharmaceuticals International Inc. | Equity | -2.5% |
| Ziopharm Oncology Inc. | Equity | -4.1% |
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
Share