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Weekly Investor – March 12, 2018


A Strong Week

Equities have been on a bit of a roller coaster so far in 2018 posting an oustanding January only to give a large portion of the gains back in February. Last week the S&P 500® Index found its footing again and returned 3.5%, recording its second best week of trading in 2018. On a year-to-date basis stocks are back in positive territory, up 4.6%.

After much anticipation, trade war fears, sparked the previous week by President Trump’s proposed import tariffs on steel and aluminum, softened last week after some exemptions were revealed. Positive US economic news also helped drive the market upward. February nonfarm payroll increases were much higher than expected, posting the largest increase in 19 months.

The S&P 500® Index was up 3.5% for the week. The top-performing sectors in the S&P 500 Index included Industrials (4.4%) and Financials (4.4%) while bottom-performing sectors included Consumer Staples (1.7%) and Utilities (-2.4%).  In the fixed-income market, the 10-year Treasury yield was even during the week, ending at 2.9%.

We continue to seek those companies that reflect our Change-Based InvestingSM approach.


Positive Changes

Baxter International Inc. (BAX) develops, manufacturers, and markets products that save and sustain the lives of people with chronic and acute medical conditions through its subsidiaries. BAX applies its expertise in medical devices to create products that advance patient care worldwide.

After years of underperformance, BAX is undergoing significant change. BAX spun off its bioscience division, Baxalta, to focus more on its core supply and device businesses. The company also announced the hiring of Jose Almeida to take over as its new CEO. Jose’s track record while running Covidien included accelerating growth and profitability at the company, two key elements to unlock shareholder value at BAX in our view.


Top 10 Equity Holdings

Alphabet, Inc. (Google, Inc.) 7.6%
Red Hat, Inc. 5.1%
Marvell Technology Group 4.9%
Baxter International Inc. 4.5%
JP Morgan Chase & Co. 4.2%
Masco Corporation 4.0%
Fortive Corporation 4.0%
MasterCard, Inc. 3.8%
Cognizant Technology 3.6%
Lincoln National 3.4%

This newsletter presents selected recommendations from portfolio managers of Argent Capital Management LLC, a registered investment advisor. Opinions reflect the portfolio manager’s judgment on the date above and are subject to change. A list of stocks recommended by Argent is available upon request. You should not assume that these recommendations are or will be profitable. In the course of it’s business, Argent’s client accounts may be buying and selling these stocks.

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