June 15, 2020

Opportunity Equity Update for Week Ended 6/12/20

Farfetch Gains on Expected Market Share Gains While Endo Falls on Opioid Concerns

Last week, the Opportunity Equity strategy lost -5.78%, underperforming the S&P 500’s -4.73% decline (Exhibit 1). The strategy ended the week down -12.96% YTD, or 798 basis points behind the S&P 500.

Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 6/12/201

Time Period Opportunity Equity S&P 500
Last Week (6/5 – 6/12) -5.78% -4.73%
MTD 6.74% -0.01%
QTD 42.56% 18.19%
YTD -12.96% -4.98%
Inception (annualized since 6/26/00) 6.56% 5.82%

Source: Bloomberg, Miller Value Partners

Farfetch Inc. (FTCH) gained over the week after Goldman wrote a positive note on the company stating that they believe FTCH has been able to continue to gain market share based on the app download data. Precigen Inc. (PGEN) crossed above the 100-day moving average. A number of analysts raised estimates for Amazon.com Inc. (AMZN) citing a strong benefit from the shift to e-commerce. Bank of America raised their price target to $3,000, upside of 18%. Peloton Interactive (PTON) gained on fears of a second waves of coronavirus.

Exhibit 2: Significant Contributors to Performance, 6/5/20 – 6/12/20

Name Type Return
*Recently Added Security” Equity 95.6%
Farfetch Ltd Equity 7.4%
Precigen Inc. Equity 29.0%
Amazon.com Inc. Equity 2.5%
Peloton Interactive Equity 2.6%

Source: Miller Value Partners

Teva Pharmaceuticals (TEVA) announced it had won its lawsuit against Emergent Biosolutions/Opiant regarding Narcan’s 4mg naloxone formation which will allow Teva to launch their generic version. Endo International (ENDP) crossed below the 50-day moving average after the New York State Department of Financial Services alleged that Endo misrepresented the safety and efficacy of its opioid products which helped drive over-prescription of opioids. Taylor Morrison Home Corp. (TMHC) crossed below the 200-day moving average. JPMorgan upgraded Taylor Morrison to an overweight rating raising their price target to $27, upside of 32%, up from $15. Energy Transfer LP (ET) crossed below the 100-day moving average. BMO upgraded Energy Transfer to an outperform rating with a price target of $13, upside of 52%. OneMain Holdings Inc. (OMF) fell below the 100-day moving average.

Exhibit 3: Significant Detractors from Performance, 6/5/20 – 6/12/20

Name Type Return
Teva Pharmaceuticals Equity -12.4%
Endo International Equity -18.9%
Taylor Morrison Home Corp Equity -11.5%
Energy Transfer LP Equity -15.2%
OneMain Holdings Inc. Equity -11.9%

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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