Weekly Investor – Dec. 27, 2010
A Year to Remember
Market Summary:
The major U.S. equity averages ended the week in the plus column as investors positioned for the final days of 2010. Despite being a holiday-shortened week for the markets, news flow remained robust thanks to earnings reports and continued activity on the merger and acquisition front. Several companies, including Walgreens and Carnival Corp. reported better-than-expected results, reminding investors that the economy continues to build upon its recovery. Expectations for the economic outlook have been rising as we head into 2011. This has been highlighted by latest ISM and Fund Manager surveys. If expectations ring true, the New Year has the potential to offer more gains for investors. Here’s to a prosperous and happy New Year!
Over the past week, top-performing sectors in the S&P 500® Index included Financials (+2.4%) and Energy (+2.3%), while bottom-performing sectors included Consumer Staples (-0.1%) and Health Care (+0.1%). In the fixed-income market, the 10-year Treasury lost ground, ending the week with yield at 3.4%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
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Opportunity in Uncertainty
UnitedHealth Group, Inc. (UNH) is best-known for its Health Care Services segment, which offers health benefit plans and administers the management of such plans for employers, employees, government agencies and for self-insured individuals. UNH also operates an OptumHealth segment, which is focused on personalized health advocacy and other health-based financial services. The company’s additional activities include pharmaceutical consulting services and pharmacy benefit management, just to name a few.
Over the past few years, UNH and its industry peers have experienced pressure from rising health care costs and a more challenging pricing environment. In addition, worries surrounding government regulation and the overall health of the economy have resulted in UNH’s attractive valuation. With industry fundamentals stabilizing and positive feedback from our Main Street contacts, we believe that UNH offers favorable odds for our clients.
Top 10 Equity Holdings
| . | |
|---|---|
| Google Inc. | 4.1% |
| Starwood Hotels | 4.0% |
| Danaher Corp. | 3.9% |
| Carnival Corp. | 3.8% |
| Qualcomm Inc. | 3.6% |
| Energizer Holdings | 3.5% |
| Biogen Idec Inc. | 3.3% |
| FactSet Research | 3.3% |
| Cisco Systems Inc. | 3.3% |
| Legg Mason Inc. | 3.2% |
U.S. Equity Indices
| Index | 12/24/10 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 11,573.5 | 0.7% | 11.0% |
| NASDAQ | 2,665.6 | 0.9% | 17.5% |
| S&P 500 | 1,256.8 | 1.0% | 12.7% |
| Russell 1000 G | 575.1 | 0.6% | 15.0% |
U.S. Credit Rates
| Index | 12/24/10 | 12/17/10 | 12/31/09 |
|---|---|---|---|
| 3 Month T-Bill | 0.1% | 0.1% | 0.1% |
| 5 Year T-Note | 2.1% | 1.9% | 2.6% |
| 10 Year T-Note | 3.4% | 3.3% | 3.8% |
| 30 Year T-Bond | 4.5% | 4.4% | 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.
