Last week, Opportunity Equity strategy gained 0.47%, outperforming the S&P 500’s 0.27% decline (Exhibit 1). The strategy ended the week up 14.15% YTD, or 454 basis points ahead of the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 6/9/171
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (6/2 – 6/9) | 0.47% | -0.27% |
| MTD | 1.46% | 0.87% |
| QTD | 6.25% | 3.34% |
| YTD | 14.15% | 9.61% |
| Inception (annualized since 12/30/1999) | 6.69% | 4.96% |
Source: Bloomberg, Miller Value Partners
RH (RH) rebounded over the week reversing some of its losses from the previous week after providing disappointing 2017 guidance. JPMorgan (JPM/WS) crossed above the 50-day moving average and Bank of America Corp. (BAC) crossed above the 50-day and 100-day moving averages. Delta Air Lines Inc. (DAL) was up over the week after announcing the previous Friday that May PRASM rose 3.5% and total system traffic was up 1.7%. Citigroup Inc. (C) was upgraded to Neutral at UBS from Sell with a price target of $64.
Exhibit 2: Significant Contributors to Performance, 6/2/17 – 6/9/17
| Name | Type | Return |
| RH | Equity | 19.3% |
| JPMorgan Chase & Co. – Warrant | Derivative | 9.6% |
| Bank of America Corp | Equity | 5.4% |
| Delta Air Lines Inc. | Equity | 3.6% |
| Citigroup Inc. | Equity | 5.5% |
Source: Miller Value Partners
Apple Inc. (AAPL) fell over the week while hosting its annual WWDC conference. At the conference people learned about the HomePod which will compete with AMZN Echo and Google’s Home. Pac Crest downgraded the stock to sector weight stating that the upside from the iPhone 8 was already priced in. Endo Pharmaceuticals Holdings Inc. (ENDP) fell below the 50-day and 100-day moving average after the FDA requested the company remove their reformulated OPANA ER from the market. Pandora Media Inc. (P) announced a strategic investment from SiriusXM of $480M in convertible preferred along with the sale of Ticketfly for $200M to Eventbrite. United Continental Holdings (UAL) was down over the week after announcing its May load factor dipped to 81.6% from 82.5% last year as capacity growth of 3.7% outpaced the 2.6% increase in traffic. Amazon.com Inc. (AMZN) announced that it would offer Prime for $5.99 for customers that receive government assistance. Piper Jaffray raised its price target on AMZN to $1200, upside of 23%.
Exhibit 3: Significant Detractors from Performance, 6/2/17 – 6/9/17
| Name | Type | Return |
| Apple Inc. C100 1/18 | Derivative | -13.0% |
| Endo Pharmaceuticals Holdings Inc. | Equity | -11.3% |
| Pandora Media Inc. | Equity | -8.4% |
| United Continental Holdings | Equity | -3.9% |
| Amazon.com Inc. | 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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