January 6, 2020

Opportunity Equity Update for Week Ended 1/3/20

Endo Raised to Overweight at Piper Jaffray While American Airlines Falls on Oil Price Spike

Last week, the Opportunity Equity strategy lost -0.73%, underperforming the S&P 500’s -0.12% decline (Exhibit 1). The strategy ended the week down -0.54% YTD, or 69 basis points behind the S&P 500.

Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 1/3/201

Time Period Opportunity Equity S&P 500
Last Week (12/27 – 1/3) -0.73% -0.12%
MTD -0.54% 0.15%
QTD -0.54% 0.15%
YTD -0.54% 0.15%
Inception (annualized since 6/26/00) 7.44% 6.24%

Source: Bloomberg, Miller Value Partners

Peloton Interactive Inc. (PTON) and Endo International (ENDP) rose above the 50-day moving average. Endo was raised to an overweight rating at Piper Jaffray with a price target of $7, upside of 49%. Credit Suisse initiated coverage of Tivity Health Inc. (TVTY) with a neutral rating and a price target of $22, upside of 8%. Intrexon Corp. (XON) crossed above the 100 and 200-day moving average after announcing that the company will refocus on healthcare, change its name to Precigen Inc. and appointed Helen Sabzevari as President and CEO. The new Precigen will encompass Precigen, ActoBio Therapeutics, Exemplar Genetics, and its majority ownership interest in Triple-Gene, as well as equity and royalty interests in therapeutics and therapeutic platforms from companies not controlled by Intrexon. Randal J. Kirk has been appointed Executive Chairman. Additionally, Intrexon executed binding agreements to sell its smaller non-healthcare businesses for $65.2M plus certain contingent payment rights and entered into an agreement to sell $35M of its common stock. There was minimal news on Medifast Inc. (MED).

Exhibit 2: Significant Contributors to Performance, 12/27/19 – 1/3/20

Name Type Return
Peloton Interactive Inc. Equity 13.3%
Endo International plc Equity 5.3%
Tivity Health Inc. Equity 4.2%
Medifast Inc. Equity 2.2%
Intrexon Corp. Equity 3.7%

Source: Miller Value Partners

Ziopharm Oncology (ZIOP) crossed below the 50, 100 and 200-day moving average while Teva Pharmaceuticals (TEVA) fell below the 50 and 200-day. ADT Inc. (ADT) crossed below the 50-day moving average with American Airlines Group (AAL) crossing below the 100-day moving average after escalating tensions between the US and Iran led to a spike in oil prices. There was minimal news on Flexion Therapeutics (FLXN).

Exhibit 3: Significant Detractors from Performance, 12/27/19 – 1/3/20

Name Type Return
Ziopharm Oncology Inc. Equity -12.6%
Teva Pharmaceutical Equity -8.7%
Flexion Therapeutics Equity -6.1%
ADT Inc. Equity -4.2%
American Airlines Group Inc. Equity -2.8%

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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