Last week, Opportunity Equity strategy gained 4.89%, outperforming the S&P 500’s 0.22% gain (Exhibit 1). The strategy ended the week up 19.16% YTD, or 918 basis points ahead of the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 6/23/171
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (6/16 - 6/23) | 4.89% | 0.22% |
| MTD | 5.92% | 1.21% |
| QTD | 10.91% | 3.69% |
| YTD | 19.16% | 9.98% |
| Inception (annualized since 12/30/99) | 6.94% | 4.97% |
Source: Bloomberg, Miller Value Partners
Valeant Pharmaceuticals International Inc. (VRX) ended the week above the 200-day moving average after announcing that John Paulson had joined the board and benefitting from the release of the Senate Healthcare bill which was largely viewed as a positive for pharmaceuticals. RH (RH) continued its climb higher as Deutsche Bank upgraded the stock to Buy with a price target of $66, upside of 11%. Intrexon Corp (XON) crossed above the 200-day moving average. Pandora Media Inc. (P) was up over the week as Gabelli initiated on the stock with a buy rating and JPMorgan lowered their price target to $14 from $18, upside of 70%. There was minimal news on Apple (AAPL).
Exhibit 2: Significant Contributors to Performance, 6/16/17 - 6/23/17
| Name | Type | Return |
| Valeant Pharmaceuticals International Inc. | Equity | 24.8% |
| RH | Equity | 13.4% |
| Intrexon Corp. | Equity | 12.4% |
| Pandora Media Inc. | Equity | 18.5% |
| Apple Inc. C100 1/18 | Derivative | 10.0% |
Source: Miller Value Partners
Bank of America Corp. (BAC) and Citigroup Inc. (C) along with the other 32 largest US bank holding companies passed the Fed’s 2017 stress test. Bank of America fell below the 50-day moving average. Lennar Corp. (LEN) declined during the week after releasing 2Q results which beat consensus. Lennar reported EPS of $0.91 versus consensus of $0.79 and order unit growth of 12% above the guidance range of 7-10% and consensus of 10%. American Airlines Group Inc. (AAL) was down over the week after receiving an unsolicited notice from Qatar Airways which intends to purchase up to 10% of AAL equity. This would not be a negotiated transaction but open market purchases. There was minimal news on MGIC Investment Corp (MTG).
Exhibit 3: Significant Detractors from Performance, 6/16/17 - 6/23/17
| Name | Type | Return |
| MGIC Investment Corp | Equity | -2.7% |
| Bank of America Corp | Equity | -2.6% |
| Lennar Corp | Equity | -1.5% |
| Citigroup Inc. | Equity | -0.8% |
| American Airlines Group Inc. | Equity | -0.3% |
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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