August 19, 2019

Opportunity Equity Update for Week Ended 8/16/19

Genworth Gains on Canadian Sale While Ziopharm Declines

Last week, the Opportunity Equity strategy lost -1.89%, underperforming the S&P 500’s -0.94% decline (Exhibit 1). The strategy ended the week up 8.40% YTD, or 833 basis points behind the S&P 500.

Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 8/16/191

Time Period Opportunity Equity S&P 500
Last Week (8/9 – 8/16) -1.89% -0.94%
MTD -8.27% -2.92%
QTD -5.82% -1.52%
YTD 8.40% 16.73%
Inception (annualized since 6/26/00) 6.43% 5.70%

Source: Bloomberg, Miller Value Partners

Genworth Financial Inc. (GNW) crossed above the 200-day moving average as Genworth announced their agreement to sell its 57% controlling stake of its Canadian unit to Brookfield Business Partners LP for C$2.4B. The company hopes this will help push forward their merger with Oceanwide. Eventbrite Inc. (EB) crossed above the 100-day moving average. Alibaba Group Holdings (BABA) crossed above the 50, 100 and 200-day moving average after reporting 1QFY20 results. The company reported revenue of Rmb114.9B vs. Rmb111.6B expected. Marketplace revenue increased by 26% YoY to Rmb58.9B with non-gaap EBITDA Rmb39.2B versus Rmb34.3B and non-gaap EPS of Rmb12.55 versus Rmb10.28. Active buyers increase 17% YoY to 674m with mobile monthly active users increasing 19% to 755m. Micron Technology Inc. (MU) gained over the week as Citi published a bull/base case on the name maintaining a sell rating at an $30 price target while noting that longer-term they could see the stock reaching +$60 once DRAM pricing recovers in 2020. NXP Semiconductors (NXPI) announced the sale of their Voice & Audio business to Shenzhen Goodix for $165M.

Exhibit 2: Significant Contributors to Performance, 8/9/19 – 8/16/19

Name Type Return
Genworth Financial Inc. Equity 10.0%
Eventbrite Inc. Equity 11.5%
Alibaba Group Holdings Equity 9.7%
Micron Technology Inc. Equity 4.8%
NXP Semiconductors Equity 3.7%

Source: Miller Value Partners

Ziopharm Oncology Inc. (QUOT) announced the publication of positive results of Phase I Monotherapy Trial of Controlled IL-12 in patients with recurrent glioblastoma in Science Translational Medicine. Bausch Health Companies Inc. (BHC) was raised to Buy from Hold at TD Securities with a price target of $28, upside of 46%. American Airlines Group Inc. (AAL) won permanent court block against alleged disruption by mechanics. There was minimal news on ADT Inc. (ADT) and OneMain Holdings Inc. (OMF).

Exhibit 3: Significant Detractors from Performance, 8/9/19 – 8/16/19

Name Type Return
Ziopharm Oncology Inc. Equity -8.2%
Bausch Health Companies Inc. Equity -5.8%
American Airlines Group Inc. Equity -10.4%
ADT Inc. Equity -8.3%
OneMain Holding Inc. Equity -4.7%

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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