Weekly Investor June 7, 2010
Feeling the Heat!
Market Summary:
The major averages all closed out the week in red territory thanks to familiar concerns regarding U.S. employment and Eurozone financial condition. Comments out of Hungary last week of a potential “Greece-style scenario” did nothing to help ease investor worries over financial contagion. This, along with disappointing U.S. employment numbers released on Friday, helped the Wall Street bears cement a firm grip on the equity market. However, in the midst of all the negative headlines, some positive data points did emerge in the form of better vehicle sales and tame inflation data. While we are early on in the month of June, investors are hoping we do not see a repeat of the wild ride provided in May. Stay tuned!
Over the past week, top-performing sectors in the S&P 500® Index included Technology (-0.9%) and Telecomm (-0.9%), while bottom-performing sectors included Basic Materials (-5.2%) and Industrials (-3.8%). In the fixed-income market the 10-year Treasury gained ground with a yield ending the week at 3.2%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
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Adding Value through Growth
Principal Financial Group, Inc. (PFG) is a provider of retirement savings, investment and insurance products and services. The company’s United States and International operations are engaged in asset accumulation and asset management. In addition, PFG provides a range of insurance solutions, including individual and group life insurance, group health insurance, individual and group disability insurance and group dental and vision insurance.
As credit markets have normalized, PFG’s book value has risen substantially, thus increasing the company’s liquidity and providing PFG the kind of stability that investors have come to expect from the company. While PFG’s life insurance segment should grow in-line with the market, we expect PFG’s higher growth 401(k) franchise to differentiate the company from its peers. Trading at a discount to its historic average with a stabilized balance sheet and improving business prospects, PFG represents favorable odds for our clients
Top 10 Equity Holdings
| Cisco Systems Inc. | 4.5% |
| Google Inc. | 4.1% |
| Newell Rubbermaid Inc. | 4.1% |
| Danaher Corp. | 3.8% |
| Starwood Hotels | 3.6% |
| Carnival Corp. | 3.6% |
| Intel Corp. | 3.4% |
| MasterCard Inc. | 3.2% |
| EMC Corp. | 3.1% |
| Energizer Holdings | 3.1% |
U.S. Equity Indices
| Index | 06/04/10 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 9,932.0 | -2.0% | -4.8% |
| NASDAQ | 2,219.2 | -1.7% | -2.2% |
| S&P 500 | 1,064.9 | -2.3% | -4.5% |
| Russell 1000 G | 477.4 | -1.7% | -4.6% |
U.S. Credit Rates
| Index | 06/04/10 | 05/28/10 | 12/31/09 |
|---|---|---|---|
| 3 Month T-Bill | 0.1% | 0.2% | 0.1% |
| 5 Year T-Note | 2.0% | 2.2% | 2.6% |
| 10 Year T-Note | 3.2% | 3.4% | 3.8% |
| 30 Year T-Bond | 4.1% | 4.3% | 4.6% |
| Prime Rate | 3.3% | 3.3% | 3.3% |
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.
