The Intellectual Investor: Opportunity Equity Weekly Updates

December 4, 2017

Opportunity Equity Update for Week Ended 12/1/17

Foot Locker was up after Black Friday While Platform announced a tack-on offering

Last week, the Opportunity Equity strategy gained 2.17%, outperforming the S&P 500’s 1.60% rise (Exhibit 1). The strategy ended the week up 25.24% YTD, or 499 basis points ahead of the S&P 500.

Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 12/1/171

Time Period Opportunity Equity S&P 500
Last Week (11/24 – 12/1) 2.17% 1.60%
MTD -0.18% -0.20%
QTD 3.94% 5.26%
YTD 25.24% 20.25%
Inception (annualized since 12/30/99) 7.06% 5.37%

Source: Bloomberg, Miller Value Partners

Financials (JPM/WS, OMF, BAC) did well over the week as the Senate made progress on tax cuts. Foot Locker Inc. (FL) was up over the week after retailers had a strong black Friday. There was minimal news on Valeant Pharmaceuticals Inc. (VRX).

Exhibit 2: Significant Contributors to Performance, 11/24/17 – 12/1/17

Name Type Return
JPMorgan Chase & Co. – Warrants Derivative 10.9%
OneMain Holdings Inc. Equity 6.1%
Bank of America Corp. Equity 4.1%
Foot Locker Inc. Equity 6.5%
Valeant Pharmaceuticals International Inc. Equity 3.8%

Source: Miller Value Partners

Platform Specialty Products Corp. (PAH) announced pricing of an additional $250M aggregate principal amount of 5.875% senior notes due 2025 at par. MKM Partners raised their price target on Inc. (AMZN) to $1,350 from $1,275 while Deutsche Bank raised its price target to $1,425 from $1,200. CNBC reported Friday that Amazon has held preliminary, high-level, exploratory talks with generic manufactures Mylan and Sandoz about entering the pharmacy space. Facebook Inc. (FB) fell below the 50-day moving average as MKM Partners raised their price target to $240 from $200, upside of 37%. There was minimal news on Pandora Media Inc. (P) and Quotient Technology Inc. (QUOT).

Exhibit 3: Significant Detractors from Performance, 11/24/17 – 12/1/17

Name Type Return
Pandora Media Inc. Equity -9.3%
Platform Specialty Products Corp. Equity -3.9%
Quotient Technology Inc. Equity -3.7% Inc. Equity -1.9%
Facebook 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, LLC

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