Weekly Investor – Sept. 27, 2010
Keeping the Momentum
Market Summary:
The major averages all marched higher for the week, adding to their year-to-date gains. Better-than-expected economic data proved once again to be the catalyst investors needed. Last week’s improving data included housing starts, unemployment claims, manufacturing data as well as an uptick in the Leading Economic Indicators index. With only a few days left in the quarter, investors will soon shift their attention to the upcoming earnings season to see if an improving backdrop leads to a better-than-expected outlook from Corporate America. Stay tuned!
Over the past week, top-performing sectors in the S&P 500® Index included Consumer Discretion (+2.9%) and Technology (+2.8%), while bottom-performing sectors included Financials (+0.1%) and Consumer Staples (+1.5%). In the fixed-income market the 10-year Treasury gained ground, ending the week at 2.5%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
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History of Execution – DHR
Danaher Corp. (DHR), headquartered in Washington, D.C., is a designer, manufacturer and marketer of medical, industrial, professional and consumer products. DHR was founded in 1969 and was previously known as DMG, Inc., but later took the Danaher name in 1984. The company produces a broad range of products including electronic calibration equipment, retail/commercial petroleum products such as underground storage tank leak detection systems, and high-precision optical systems for the analysis of microstructures and aerospace defense articles, among others. DHR’s primary product lines are sold in North America, Europe and Asia.
DHR has a long history of delivering consistent earnings growth through internal development and by acquiring businesses that are fast growing and have high returns. Over the years, the company’s management team has demonstrated skill and discipline in selecting and integrating its many acquisitions. A more recent acquisition marked DHR’s expansion in the water treatment industry, an industry with strong growth potential. While general economic uncertainties have depressed DHR’s multiples, in the long-term, we expect DHR to outperform its peers and the market.
Top 10 Equity Holdings
| Google Inc. | 4.1% |
| Newell Rubbermaid | 4.1% |
| Cisco Systems Inc. | 4.0% |
| Starwood Hotels | 3.9% |
| Energizer Holdings | 3.7% |
| Danaher Corp. | 3.7% |
| Carnival Corp. | 3.5% |
| EMC Corp. | 3.4% |
| MasterCard Inc. | 3.3% |
| FactSet Research Systems | 3.2% |
U.S. Equity Indices
| Index | 09/24/10 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 10,860.3 | 2.4% | 4.1% |
| NASDAQ | 2,381.2 | 2.8% | 4.9% |
| S&P 500 | 1,148.7 | 2.0% | 3.0% |
| Russell 1000 G | 517.6 | 2.6% | 3.5% |
U.S. Credit Rates
| Index | 09/24/10 | 09/17/10 | 12/31/09 |
|---|---|---|---|
| 3 Month T-Bill | 0.1% | 0.2% | 0.1% |
| 5 Year T-Note | 1.3% | 1.4% | 2.6% |
| 10 Year T-Note | 2.5% | 2.8% | 3.8% |
| 30 Year T-Bond | 3.7% | 3.9% | 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.
