Last week, Opportunity Equity strategy increased 0.47%, underperforming the S&P 500’s 0.72% gain (Exhibit 1). The strategy ended the week up 20.50% YTD, or 626 basis points ahead of the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 9/29/171
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (9/22 - 9/29) | 0.47% | 0.72% |
| MTD | 3.77% | 2.06% |
| QTD | -0.11% | 4.48% |
| YTD | 20.50% | 14.24% |
| Inception (annualized since 12/30/99) | 6.90% | 5.12% |
Source: Bloomberg, Miller Value Partners
Home builders moved higher over the week as hurricane fears faded and the Republicans introduced a tax proposal that would cut taxes for corporations and individuals. Lennar Corp. (LEN) crossed above the 50 and 100-day moving average. Endurance International Group Holdings (EIGI) crossed above the 50, 100 and 200-day moving average. There was minimal news on Pulte Group Inc. (PHM) and MGIC Investment Corp (MTG).
Exhibit 2: Significant Contributors to Performance, 9/22/17 – 9/29/17
| Name | Type | Return |
| Pulte Group | Equity | 5.6% |
| Lennar Corp. | Equity | 5.0% |
| MGIC Investment Corp. | Equity | 4.2% |
| *Recently Added Security* | Equity | 7.3% |
| Endurance International Group Holdings | Equity | 4.5% |
Source: Miller Value Partners
Wayfair Inc. (W) continued to be negatively impacted by the questionable academic paper published two weeks ago as the stock fell below the 50 and 100-day moving average. RH (RH) fell over the week despite Deutsche Bank upgrading the stock to a buy rating with a price target of $84 (upside of 19%) and CEO Gary Friedman purchasing another $1M in RH shares for the second time this month. Pandora Media Inc. (P) fell over the week after it was announced that activist investor Corvex Management LP had cut its stake in the company from 8.8% to 4.7%. Flexion Therapeutics (FLXN) was down over the week as it awaits the outcome of Zilretta’s PDUFA on Oct. 6th. There was minimal news on Quotient Technology Inc. (QUOT).
Exhibit 3: Significant Detractors from Performance, 9/22/17 - 9/29/17
| Name | Type | Return |
| Wayfair Inc. | Equity | -9.6% |
| Quotient Technology Inc. | Equity | -4.3% |
| RH | Equity | -2.6% |
| Pandora Media Inc. | Equity | -6.4% |
| Flexion Therapeutics | Equity | -6.3% |
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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