Weekly Investor – July 06, 2010
No Double Dipping
Market Summary:
The major averages continued their downward trajectory, ending the week with bruising losses and officially ending the 2nd quarter. Soft patches in the economy are becoming increasingly evident and investors are paying close attention. The phrase “double-dip recession” has appeared in headlines throughout the week as memories of 2008 remain fresh. An increase in unemployment claims, disappointing home sales data, and a smaller-than-expected bounce in payroll employment all weighed heavily on sentiment. As earnings season kicks into full gear, investors can only hope Corporate America will provide some positive momentum to fend off the bears of Wall Street.
Over the past week, top-performing sectors in the S&P 500® Index included Consumer Staples (-1.2%) and Telecomm (-1.3%), while bottom-performing sectors included Financials (-7.6%) and Basic Materials (-6.8%). In the fixed-income market the 10-year Treasury gained ground with yield ending the week at 3.0%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
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Winning New Products
Trimble Navigation Ltd. (TRMB) develops, manufactures and markets advanced global positioning system (“GPS”) products and solutions for the engineering and construction, agriculture, transportation and communications industries.
TRMB’s end markets struggled over the past two years as funding for construction projects tightened and commodity prices fell. Despite the difficult environment, TRMB’s continued investment in new technologies and the completion of several small, strategic acquisitions enabled the company to gain market share. As customers experienced tangible evidence that TRMB’s products enabled them to operate more efficiently, customers increased orders in the second half of 2009 and TRMB began to post accelerating revenue growth. With a best-in-breed financial profile and the potential for earnings acceleration as the economy improves, we believe TRMB offers favorable odds to our clients.
Top 10 Equity Holdings
| Cisco Systems Inc. | 4.4% |
| Google Inc. | 3.9% |
| Newell Rubbermaid Inc. | 3.9% |
| Danaher Corp. | 3.8% |
| Starwood Hotels | 3.6% |
| Allergan Inc. | 3.4% |
| MasterCard Inc. | 3.4% |
| Intel Corp. | 3.3% |
| EMC Corp. | 3.3% |
| Carnival Corp. | 3.3% |
U.S. Equity Indices
| Index | 07/02/10 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 9,686.5 | -4.5% | -7.1% |
| NASDAQ | 2,091.8 | -5.9% | -7.8% |
| S&P 500 | 1,022.6 | -5.0% | -8.3% |
| Russell 1000 G | 455.5 | -5.1% | -8.9% |
U.S. Credit Rates
| Index | 07/02/10 | 06/25/10 | 12/31/09 |
|---|---|---|---|
| 3 Month T-Bill | 0.1% | 0.1% | 0.1% |
| 5 Year T-Note | 1.8% | 1.9% | 2.6% |
| 10 Year T-Note | 3.0% | 3.1% | 3.8% |
| 30 Year T-Bond | 3.9% | 4.1% | 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.
