December 30, 2019

Opportunity Equity Update for Week Ended 12/27/19

Flexion Gains on Revised Zilretta Label While OneMain Dropped from Stephen’s 2020 Best Ideas List

Last week, the Opportunity Equity strategy lost -0.57%, underperforming the S&P 500’s 0.60% gain (Exhibit 1). The strategy ended the week up 34.56% YTD, or 272 basis points ahead of the S&P 500.

Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 12/27/191

Time Period Opportunity Equity S&P 500
Last Week (12/20 – 12/27) -0.57% 0.60%
MTD 1.25% 3.29%
QTD 19.06% 9.36%
YTD 34.56% 31.84%
Inception (annualized since 6/26/00) 7.49% 6.25%

Source: Bloomberg, Miller Value Partners

Flexion Therapeutics (FLXN) rose over the week after announcing that the FDA had approved a revised product label for Zilretta removing the language stating that Zilretta is “not intended for repeat administration”. The company was pleased with the change and with the inclusion of their repeat dosing study results which allows them to use the study results in marketing material. Inc. (AMZN) crossed above the 200-day moving average after the company noted that its holiday season was “record breaking” with “tens of millions” of Amazon devices like the Echo Dot sold with 5m new customers starting Prime free trials or paid membership globally. There was minimal news on Medifast Inc. (MED), Ziopharm Oncology Inc. (ZIOP), and Eventbrite (EB).

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

Name Type Return
Flexion Therapeutics Equity 9.7% Inc. Equity 4.7%
Medifast Inc. Equity 4.3%
Ziopharm Oncology Inc. Equity 3.8%
Eventbrite Inc. Equity 3.3%

Source: Miller Value Partners

Endo International (ENDP) crossed below the 50 and 200-day moving average while Peloton Interactive (PTON) and Brighthouse Financial Inc. (BHF) fell below the 50-day. OneMain Holdings Inc. (OMF) was dropped from Stephens Best Ideas list for 2020. There was minimal news on Stitch Fix Inc. (SFIX).

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

Name Type Return
Endo International Equity -10.6%
Peloton Interactive Equity -10.0%
Brighthouse Financial Inc. Equity -4.4%
OneMain Holdings Inc. Equity -3.4%
Stitch Fix Inc. Equity -4.0%

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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