Weekly Investor – Nov. 01, 2010
Wait and See
Market Summary:
With the exception of a modest increase in the NASDAQ, the major U.S. equity averages ended the week relatively flat. Investors were busy digesting earnings reports, and while the majority of companies reported better than expected earnings and sales growth, third quarter GDP came in at 2%, a level below that which is needed to generate job creation. Employment and housing data were weak but came in at expected levels. This week, investors will pay attention to election results and await details from this week’s FOMC meeting on the potential for “QE2.”
Over the past week, top-performing sectors in the S&P 500® Index included Basic Materials (+1.4%) and Technology (+0.8%), while bottom-performing sectors included Industrials (-1.0%) and Utilities (-0.6%). In the fixed-income market the 10-year Treasury lost ground, ending the week at 2.6%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
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Pipeline to Drive Growth
Gilead Sciences, Inc. (GILD), a biopharmaceutical company, engages in the discovery, development, and commercialization of therapeutics for the treatment of life-threatening infectious diseases. Notably, GILD is a leader in drug development for the treatment of human immunodeficiency virus (HIV) in adults.
After years of being a “growth darling” for investors, GILD’s stock has underperformed this past year as investors have focused on GILD’s patent expirations later this decade and questioned the company’s ability to drive growth beyond that horizon. Despite such concern, the core business continues to execute, delivering solid sales and earnings growth. As GILD’s drug development pipeline continues to progress, including next-generation HIV therapies, we believe investors will once again become comfortable with the company’s growth prospects, offering the potential for attractive upside from current levels.
Top 10 Equity Holdings
| . | |
|---|---|
| Google Inc. | 4.4% |
| Newell Rubbermaid | 3.9% |
| Cisco Systems Inc. | 3.9% |
| Starwood Hotels | 3.8% |
| Carnival Corp. | 3.8% |
| Danaher Corp. | 3.8% |
| Energizer Holdings | 3.7% |
| MasterCard Inc. | 3.4% |
| Biogen Idec Inc. | 3.3% |
| FactSet Research | 3.2% |
U.S. Equity Indices
| Index | 10/29/10 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 11,118.5 | -0.1% | 6.6% |
| NASDAQ | 2,507.4 | 1.1% | 10.5% |
| S&P 500 | 1,183.1 | 0.0% | 6.1% |
| Russell 1000 G | 540.1 | 0.3% | 8.0% |
U.S. Credit Rates
| Index | 10/29/10 | 10/22/10 | 12/31/09 |
|---|---|---|---|
| 3 Month T-Bill | 0.1% | 0.1% | 0.1% |
| 5 Year T-Note | 1.2% | 1.1% | 2.6% |
| 10 Year T-Note | 2.6% | 2.5% | 3.8% |
| 30 Year T-Bond | 4.0% | 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.
