Income Strategy Weekly Update for 04/12/24 – 04/19/24

UGI Rises on Potential Investment in AmeriGas, While MicroStrategy Slumps in Sympathy with Bitcoin

Last week, the Income Strategy’s representative account fell -1.07% (net of fees), outperforming the S&P 500’s -3.04% loss and underperforming the ICE BofA Merrill Lynch High Yield Master II Index’s -0.58% loss. (Exhibit 1). The strategy ended the week up 5.57% YTD, or 578 basis points ahead of the high yield index and 99 basis points ahead of the S&P 500.

Exhibit 1: Performance of Income Strategy Representative Account Net of Fees Versus High Yield, Equity Indices, Through 4/19/2024¹

Time Period	Income Strategy Representative Account	ICE BofA Master High Yield II Index	S&P 500 Index
Last Week (4/12- 4/19)	-1.07%	-0.58%	-3.04%
MTD	-5.74%	-1.71%	-5.40%
QTD	-5.74%	-1.71%	-5.40%
YTD	5.57%	-0.21%	4.58%
1 Year	22.49%	8.70%	21.45%
5 Year	4.94%	3.48%	13.20%
10 Year	4.35%	4.16%	12.37%
Inception (annualized since 2/28/2014)	4.23%	4.16%	12.25%

Source: Bloomberg, Miller Value Partners.

Five equities comprised last week’s top 5 contributors. UGI Corp (UGI) rose as reports circulated that Adnoc, a unit of Abu Dhabi National Oil Co, is considering a potential investment in AmeriGas, UGI’s propane distribution unit, that could value AmeriGas at “several billion US dollars.” UGI’s management team announced in August 2023 that it was conducting a review of strategic alternatives for its LPG (liquefied petroleum gas) businesses, with a focus on AmeriGas. Encore Wire (WIRE) gained after the company announced that it will be acquired by Prysmian SpA for $290/share, valuing WIRE at an enterprise value of €3.9B ($4.2B), which represents an EV/EBITDA (FY23) multiple of 8.2x, and 6.3x when including the run-rate synergies expected from the deal. The deal is expected to close in the second half of 2024 and under the terms of the agreement, WIRE may solicit alternative acquisition proposals from third parties during a 35-day “go-shop” period following the date of execution of the merger agreement. Shares of OneMain Holdings (OMF) advanced above the stock’s 50-day and 100-day moving averages last week. There was no price-changing news for Jackson Financial (JXN) or AT&T (T) last week.

Exhibit 2: Significant Contributors to Income Strategy Representative Account Performance, 04/12/24 – 04/19/24

Name	Type
UGI Corp	Equity
Encore Wire Corp	Equity
OneMain Holdings	Equity
Jackson Financial Inc	Equity
AT&T Inc	Equity

Source: Miller Value Partners.

Four equities and one bond comprised last week’s top 5 detractors. MicroStrategy Inc 0.75% 12/15/2025 dropped last week in sympathy with Bitcoin, as the prominent cryptocurrency dipped below $60K for the first time since early March before recovering to end the week at ~$64K, or a -4.6% weekly decline. Shares of Boise Cascade (BCC) declined below the stock’s 50-day moving average in conjunction with weak housing data, while Lincoln National (LNC) dropped below its respective 50-day and 100-day moving averages last week. Chord Energy (CHRD) fell despite Piper Sandler reiterating its overweight rating for the oil and gas exploration and production (E&P) company and raising its price target to $230, approximately 27.8% above Friday’s closing price. There was no price-changing news for GEO Group (GEO) last week.

Exhibit 3: Significant Detractors From Income Strategy Representative Account Performance, 04/12/24 – 04/19/24

Name	Type
MicroStrategy Inc 0.75% 12/15/2025	Bond
Boise Cascade Co	Equity
Chord Energy Corp	Equity
Lincoln National Corp	Equity
GEO Group Inc	Equity

Source: Miller Value Partners.

As of prior week’s market close unless otherwise stated.

¹The performance figures for the representative Income Strategy account reflect the deduction of investment management fees and certain other expenses. Returns greater than 1 year are annualized.

For additional information about Income Strategy performance, please click on the Income Strategy Composite Performance Disclosure. Past performance is no guarantee of future results.

Significant Contributors and Significant Detractors are based on holdings that had the greatest effect on representative account performance for the week. Holdings that have been in the portfolio 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. There is no guarantee that market trends discussed herein will continue. 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. Portfolio composition is shown as of a point in time and is subject to change without notice.