Weekly Investor – Nov. 22, 2010
Never too Early to Give Thanks
Market Summary:
The major U.S. equity averages closed near unchanged levels for the week. After months of headline grabbing news, ranging from “QE2” to the results of the general election, the market took a bit of a breather as it heads into the all important holiday shopping season. This past week, news came in mostly better than expected, as unemployment claims declined, retail sales improved, and the Leading Economic Indicators continued to rebound. Data on the housing side remained soft with housing starts and mortgage applications remaining weak. This week, the health of the consumer will remain in focus as investors prepare for the official start to the holiday shopping season with the annual “Black Friday.” With Thanksgiving quickly approaching, investors should take the opportunity to celebrate positive gains from the markets thus far in 2010.
Over the past week, top-performing sectors in the S&P 500® Index included Industrials (+0.8%) and Energy (+0.6%), while bottom-performing sectors included Financials (-0.8%) and Utilities (-0.7%). In the fixed-income market the 10-year Treasury remained steady, ending the week at 2.8%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
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New Strategy Driving Results
Herbalife LTD. (HLF) is a global network marketing company that sells weight management, nutritional supplement, fitness and personal care products. Based in Grand Cayman, Cayman Islands, HLF offers science-based products in four principal categories: weight management, targeted nutrition, skin nutrition, and energy, sports and fitness.
HLF has been experiencing strong growth fueled in part by its changing business model which focuses on “daily consumption” as opposed to the monthly consumption model of most fitness supplements. HLF’s distributors operate nutrition clubs where customers are able to purchase products on a daily basis, thus eliminating large cash outlays normally required to purchase a month’s supply of product. The daily consumption option has greatly expanded HLF’s addressable customer base. HLF’s combination of strong fundamental performance, enhanced growth profile, and valuation at a discount to its peers offers a favorable risk / reward profile for our clients.
Top 10 Equity Holdings
| . | |
|---|---|
| Google Inc. | 4.2% |
| Starwood Hotels | 4.0% |
| Danaher Corp. | 3.7% |
| Qualcomm Inc. | 3.7% |
| Carnival Corp. | 3.6% |
| Energizer Holdings | 3.4% |
| MasterCard Inc. | 3.4% |
| Biogen Idec Inc. | 3.4% |
| Cisco Systems Inc. | 3.3% |
| FactSet Research | 3.2% |
U.S. Equity Indices
| Index | 11/19/10 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 11,203.6 | 0.1% | 7.4% |
| NASDAQ | 2,518.1 | 0.0% | 11.0% |
| S&P 500 | 1,199.7 | 0.0% | 7.6% |
| Russell 1000 G | 550.3 | 0.4% | 10.0% |
U.S. Credit Rates
| Index | 11/19/10 | 11/12/10 | 12/31/09 |
|---|---|---|---|
| 3 Month T-Bill | 0.1% | 0.1% | 0.1% |
| 5 Year T-Note | 1.5% | 1.4% | 2.6% |
| 10 Year T-Note | 2.8% | 2.8% | 3.8% |
| 30 Year T-Bond | 4.2% | 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.
