September 9, 2019

Opportunity Equity Update for Week Ended 9/6/19

Endo Up on CCH FDA Submission While Mallinckrodt Down on Hiring of Restructuring Consultants

Last week, the Opportunity Equity strategy gained 2.23%, outperforming the S&P 500’s 1.83% rise (Exhibit 1). The strategy ended the week up 11.39% YTD, or 911 basis points behind the S&P 500.

Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 9/6/191

Time Period Opportunity Equity S&P 500
Last Week (8/30 – 9/6) 2.23% 1.83%
MTD 2.23% 1.83%
QTD -3.22% 1.66%
YTD 11.39% 20.50%
Inception (annualized since 6/26/00) 6.56% 5.86%

Source: Bloomberg, Miller Value Partners

Endo International (ENDP) crossed above the 50-day as the company announced their BLA submission to the FDA for collagenase clostridium histolyticum (CCH) in the treatment of patients with cellulite. ADT Inc. (ADT) gained after launching a $3.15B seven-year term loan B with a $625M add-on to refinance its existing ~$3.41b facility due 2022 and $300 1st Lien Senior Secured Notes due 2020. Micron Technology Inc. (MU) positive over the week as supply chain checks point to positive NAND-DRAM trends near-term with customers accepting increased NAND pricing. There was minimal news on RH (RH) and OneMain Holdings Inc. (OMF).

Exhibit 2: Significant Contributors to Performance, 8/30/19 – 9/6/19

Name Type Return
Endo International Equity 46.1%
ADT Inc. Equity 12.2%
Micron Technology Inc. Equity 8.2%
RH Equity 4.1%
OneMain Holdings Inc. Equity 3.9%

Source: Miller Value Partners

Tivity Health Inc. (TVTY) crossed below the 50-day moving average. Mallinckrodt plc (MNK) declined over the week after Bloomberg reported that the company had hired restructuring advisers. The company then announced a settlement in principle to resolve the track 1 opioid cases in two Ohio counties. The settlement is for a $24M cash payment and $6M in generic product donations. Stitch Fix Inc. (SFIX) announced the purchase of technology and IP of digital wardrobe platform Finery. Eventbrite Inc. (EB) crossed below the 50-day moving average. There was minimal news on Ziopharm Oncology Inc. (ZIOP).

Exhibit 3: Significant Detractors from Performance, 8/30/19 – 9/6/19

Name Type Return
Ziopharm Oncology Inc. Equity -8.2%
Tivity Health Inc. Equity -9.0%
Mallinckrodt plc Equity -29.3%
Stich Fix Inc. Equity -4.8%
Eventbrite Inc Equity -2.3%

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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