Last week, Opportunity Equity strategy advanced 2.97%, outperforming the S&P 500’s 1.63% gain (Exhibit 1). The strategy ended the week up 20.52% YTD, or 719 basis points ahead of the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 9/15/171
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (9/8 - 9/15) | 2.97% | 1.63% |
| MTD | 3.80% | 1.25% |
| QTD | -0.09% | 3.64% |
| YTD | 20.52% | 13.33% |
| Inception (annualized since 12/30/99) | 6.92% | 5.08% |
Source: Bloomberg, Miller Value Partners
Genworth Financial Inc. (GNW) crossed above the 50, 100 and 200-day moving average following Off Wall Street Consulting Group initiating coverage with a buy rating and the announcement that the Virginia insurance regulators approved the proposed China Oceanwide acquisition deal. Genworth still is awaiting approval for the deal from Delaware, Australia, Canada and China. Quotient Technology Inc. (QUOT) rose as D.A. Davidson initiated coverage of the stock with a buy rating and a short-term price target of $18, upside of 9% and long-term price target of $25, upside of 52%. JPMorgan Chase & Co. Warrants (JPM/WS) and Bank of America (BAC) moved up over the week as the 10yr yield rose to 2.2%. The JPM/WS crossed above the 100-day moving average and the company released August card charge-offs which increased to 2.41% from 2.36% the previous month with 30-day+ delinquencies increasing 1bps to 1.16%. BAC rose above the 50, 100, and 200-day moving average and released August card charge-offs which increased to 2.67% from 2.54% the prior month, with 30-day+ delinquencies flat sequentially at 1.55%. American Airlines Group Inc. (AAL) lowered 3Q RASM guidance to 1.0% - flat, down from prior guidance of 0.5% - 2.5%. The company also lowered pre-tax margin expectations to 8.5% - 10.5% from 10% - 12% which they attribute two thirds to Hurricane Irma and one third driven by increased fuel costs.
Exhibit 2: Significant Contributors to Performance, 9/8/17 – 9/15/17
| Name | Type | Return |
| Genworth Financial Inc. | Equity | 15.9% |
| Quotient Technology Inc. | Equity | 9.2% |
| JPMorgan Chase & Co. - Warrant | Derivative | 7.0% |
| Bank of America Corp. | Equity | 6.5% |
| American Airlines Group Inc. | Equity | 5.5% |
Source: Miller Value Partners
Allergan PLC (AGN) fell below the 200-day moving average as it became less clear whether the company’s patent transfer for Restatsis to the Saint Regis Mohawk Tribe would be able to shield it from patent challenges by Mylan and others. There was minimal news on the other top detractors.
Exhibit 3: Significant Detractors from Performance, 9/8/17 - 9/15/17
| Name | Type | Return |
| Allergan PLC | Equity | -5.7% |
| Platform Specialty Products Corp. | Equity | -2.8% |
| Pandora Media Inc. | Equity | -3.8% |
| Intrexon Corp. | Equity | -2.4% |
| *Recently Added Security* | Equity | -2.8% |
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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