January 21, 2020

Opportunity Equity Update for Week Ended 1/17/20

Endo and Teva Gain on Perrigo Earnings and Opioid Settlement Speculation While Flexion Falls Below the 50-Day

Last week, the Opportunity Equity strategy gained 5.00%, outperforming the S&P 500’s 1.99% advance (Exhibit 1). The strategy ended the week up 4.10% YTD, or 96 basis points ahead of the S&P 500.

Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 1/17/201

Time Period Opportunity Equity S&P 500
Last Week (1/10 – 1/17) 5.00% 1.99%
MTD 4.10% 3.14%
QTD 4.10% 3.14%
YTD 4.10% 3.14%
Inception (annualized since 6/26/00) 7.68% 6.39%

Source: Bloomberg, Miller Value Partners

Endo International (ENDP) and Teva Pharmaceuticals (TEVA) moved above the 50 and 200-day moving average on renewed hopes of an opioid settlement. Endo announced an $8.75M settlement with Oklahoma over the week while Teva CEO sounded optimistic on the potential for settlement progress before the New York Attorney General trail date in Mid-March. The stocks were further supported by the strong preliminary 4Q results from Perrigo, a generic manufacturer, which showed net sales 5% ahead of consensus helping pare some of the overly negative market sentiment towards generic manufacturers. Tivity Health Inc. (TVTY) gained after presenting at the JP Morgan Healthcare Conference. Peloton Interactive (PTON) crossed above the 50-day moving average as Wedbush initiated on the name with an outperform rating and a price target of $37, upside of 17%. There was minimal news on Farfetch Limited (FTCH).

Exhibit 2: Significant Contributors to Performance, 1/10/20 – 1/17/20

Name Type Return
Endo International Equity 32.8%
Farfetch Limited Equity 15.7%
Tivity Health Equity 11.9%
Teva Pharmaceuticals Equity 13.2%
Peloton Interactive Equity 13.1%

Source: Miller Value Partners

Flexion Therapeutics (FLXN) crossed below the 50-day moving average while Intrexon Corp. (XON) fell below the 50 and 200-day moving average. UBS raised their price target for Amazon.com Inc. (AMZN) to $2,305 up from $2,100 implying an upside of 26%. There was minimal news on Genworth Financial (GNW) and Eventbrite Inc. (EB).

Exhibit 3: Significant Detractors from Performance, 1/10/19 – 1/17/20

Name Type Return
Flexion Therapeutics Equity -7.4%
Intrexon Corp. Equity -9.9%
Genworth Financial Equity -2.3%
Eventbrite Inc. Equity -2.5%
Amazon.com Inc. Equity -1.0%

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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