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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Miller Value Partners Deep Value Strategies 2023 Q2 Investor Letter | Buyside Digest

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Primary Source Intelligence • Q2 2023 Letter Analysis

Miller Value Partners Deep Value Strategies Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Miller Value Partners Deep Value Strategies. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

Annualized+22%

Positioning StanceConstructive

GeographyUS

Digest Analysis

Quick Take

"Strategy focuses on mispriced cyclicals trading at 40-90% discount to growth stocks. Added Western Alliance bank and Gray Television broadcast company."

Executive Summary

Miller Value Partners' Deep Value strategy underperformed in Q2 2023, declining 2.5% net versus 6.4% for the S&P 1500 Value Index, as extreme market concentration continued with the Top 5 S&P 500 stocks generating over 70% of index returns. The strategy focuses on significantly mispriced cyclicals and transformation stories, with holdings experiencing valuation compression as small cap and value factors lagged. Gannett was the largest contributor, rising over 20% on cost reduction progress and digital transformation potential. New positions were initiated in Western Alliance, a regional bank trading at deep discount following Silicon Valley Bank contagion fears, and Gray Television, positioned for political advertising recovery and new studio economics. The manager emphasizes that Small Cap Value trades at 40-90% discount to growth stocks near Covid lows, with Russell 2000 in extended bear market for 17 months. Historical analysis suggests significant upside potential as marketplace eventually broadens out and rebalances market concentration.

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Institutional Meta Strategy

Meta Strategy Gauges

Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.

Signal Matrix

Market Conviction

78%

CautiousHigh

High Conviction (78%)

High conviction evidenced by concentrated portfolio approach with detailed analysis of individual holdings. Manager provides specific valuation metrics, catalysts, and upside targets for each position. Strong conviction in transformation stories like Gannett and Quad Graphics, with clear thesis for each holding and willingness to add new positions during market stress.

Growth Outlook

38%

BearishBullish

Neutral (38%)

Manager acknowledges that longer duration equities and Mega Caps may continue receiving marketplace votes over coming months, but expresses concern about extended valuations and narrow market breadth. Cautious tone regarding Technology sector valuations and potential for valuation reset.

Risk Appetite

60%

DefensiveAggressive

Balanced (60%)

Strategy maintains concentrated investments in mispriced cyclicals and transformation stories. Initiated two new positions during the quarter (Western Alliance and Gray Television) despite market headwinds. Portfolio positioned for long-term value realization with conviction in specific holdings.

Capital Deployment

25%

De-riskingDeploying

De-risking (25%)

Moderate deployment evidenced by initiation of two new positions (Western Alliance and Gray Television) during the quarter. No cash level changes mentioned, but selective addition of new names suggests modest net deployment activity.

Forward Guidance

45%

CautiousExpansionary

Neutral (45%)

Manager expects to continue focusing on out-of-favor areas of the market where valuation spreads create attractive long-term reward/risk opportunities. Selective deployment bias toward Small Cap Value and mispriced cyclicals, though acknowledges near-term headwinds may persist.

Language Signal

35%

BearishBullish

Bearish (35%)

Language emphasizes attractive opportunities, mispriced securities, and significant upside potential, but balanced with acknowledgment of near-term challenges and extended underperformance. More opportunity-focused than risk-focused overall.

Perceived Risk

65%

Low RiskElevated

Elevated Risk (65%)

Manager identifies meaningful risks including Technology sector valuation concerns, potential for earnings disappointment, and historical pattern of Tech sector lagging after rate pause. Discusses extended valuation multiples and risk of valuation reset, though not alarmed about systemic risks.

Opportunity Density

75%

ScarceAbundant

Abundant (75%)

Manager sees abundant opportunities in out-of-favor areas, particularly Small Cap Value trading at historical discounts. Emphasizes significant upside potential in mispriced cyclicals and transformation stories with limited analyst coverage. Views current environment as creating attractive long-term reward/risk opportunities.

Time Horizon

70%

Short-TermLong-Term

Decade+ (70%)

Multi-year investment horizon evidenced by focus on transformation stories and cyclical recovery themes. Manager discusses 12-18 month catalysts for Gannett, 3-5 year outlook for Nabors, and long-term value realization for portfolio holdings. Acknowledges some investments may require longer investment time horizon.