Opportunity Equity Weekly Updates

October 19, 2020

Opportunity Equity Update for Week Ended 10/16/20

Flexion Gain on Sales Preannouncement, While Precigen Falls Despite FDA Approval

Last week, the Opportunity Equity strategy fell -1.41%, trailing the S&P 500’s 0.21% increase (Exhibit 1). The strategy ended the week up 9.12% YTD, 33 basis points behind the S&P 500.

Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 10/16/201

Time Period Opportunity Equity S&P 500
Last Week (10/9 – 10/16) -1.41% 0.21%
MTD 6.71% 3.67%
QTD 6.71% 3.67%
YTD 9.12% 9.45%
Inception (annualized since 6/26/00) 7.63% 6.46%

Source: Bloomberg, Miller Value Partners

Flexion (FLXN) crossed above the 50, 100 and 200-day moving average after preannouncing sales of Zilretta that were ahead of expectations. Revenue was $23.6mm vs. expectations of $20.6mm. The company added 217 new accounts in the quarter, bringing their total accounts to 4,072 of their 5,400 target accounts. Lane Research rated Stitch Fix Inc. (SFIX) a buy with a price target of $45, upside of 38%. Alphabet Inc. (GOOG) rose as Deutsche Bank raised their price target from $1,975 to $2,020 (upside of 28.4%), crossing above the 50-day moving average in the process. Alibaba Group Holdings. (BABA) gained as Ant Group raises IPO valuation target to $280B. China Renaissance increased its price target on the name to $355 from $315 (upside of 15.5%), while Nomura raised their target to $353 from $309 (upside of 14.9%). Farfetch Ltd. (FTCH) announced a pilot program with Bambuser AB to allow customers to shop with them via live video across multiple languages.

Exhibit 2: Significant Contributors to Performance, 10/9/20 – 10/16/20

Name Type Return
Flexion Therapeutics Equity 18.1%
Stitch Fix, Inc. Equity 3.5%
Alphabet, Inc. Equity 3.8%
Alibaba Group Holding Ltd. Equity 2.5%
Farfetch Ltd. Equity 1.4%

Source: Miller Value Partners

Uber Technologies Inc. (UBER) crossed below the 50-day moving average. The company announced a joint-venture with SK Telecom, to create a South Korean taxi-share company investing $150M in the start-up. Precigen (PGEN) fell despite getting approval from the FDA to use its UltraPorator device to manufacture their UltraCAR-T therapy in order to study how the therapy works in treating acute myeloid leukemia and ovarian cancer. The machine can manufacture T-cell therapies overnight and streamlines the previously labor intensive process. There was limited news on ADT Inc. (ADT) on the week.  

Exhibit 3: Significant Detractors from Performance, 10/9/20 – 10/16/20

Name Type Return
Uber C32 Jan 2022 Derivative -23.7%
Precigen Inc. Equity -15.1%
ADT Inc. Equity -4.8%
Uber Technologies Inc. Equity -9.5%
*New Security* Equity -7.9%

Source: Miller Value Partners

1The performance figures reflect the results of a representative account net of management fee 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. Content may not be reprinted, republished or used in any manner without written consent from Miller Value Partners.

©2019 Miller Value Partners, LLC

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