Weekly Investor – Jan. 10, 2011
A Positive Note
Market Summary:
Continuing the momentum from December, the major U.S. equity averages started on a positive note in the first trading week of 2011. The technology heavy NASDAQ was helped by excitement generated by the many gadgets showcased at this year’s Consumer Electronic Show (CES). However, the positive sentiment was somewhat tempered later in the week by mixed December same-store sales reported by major retailers. Additionally, mixed employment data contributed to investors taking a more cautious view. Fourth quarter earnings season begins this week, and investors will once again turn their attention to clues into what’s in store for 2011.
Over the past week, top-performing sectors in the S&P 500® Index included Technology (+2.5%) and Financials (+1.7%), while bottom-performing sectors included Telecommunications (-1.6%) and Basic Materials (-0.9%). In the fixed-income market, the 10-year Treasury lost ground during the week with the yield ending at 3.4%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
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Gaining Market Share
Varian Medical Systems, Inc. (VAR) is a leader in radiation therapy and oncology treatment. The company designs, manufactures, sells and services equipment and software products used to treat cancer with radiation, operating in two segments: Oncology Systems and X-ray Products.
Over the past 18 months, VAR’s stock has become more attractive from a valuation standpoint as large capital equipment purchases by hospitals have been negatively affected by a host of budgetary issues. Despite the challenging environment, VAR has continued to take market share from competitors along the way and strengthen its leading position. With hospital spending beginning to stabilize and VAR’s competitive position even stronger today, we feel an investment in VAR offers favorable odds for our clients.
Top 10 Equity Holdings
| . | |
|---|---|
| Google Inc. | 4.2% |
| Starwood Hotels | 4.1% |
| Carnival Corp. | 3.9% |
| Danaher Corp. | 3.8% |
| Qualcomm Inc. | 3.8% |
| Energizer Holdings | 3.4% |
| Cisco Systems Inc. | 3.4% |
| Biogen Idec Inc. | 3.3% |
| FactSet Research | 3.3% |
| EMC Corp. | 3.3% |
U.S. Equity Indices
| Index | 01/07/11 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 11,614.6 | 0.3% | 0.3% |
| NASDAQ | 2,694.1 | 1.6% | 1.6% |
| S&P 500 | 1,267.8 | 0.8% | 0.8% |
| Russell 1000 G | 579.0 | 0.7% | 0.7% |
U.S. Credit Rates
| Index | 01/07/11 | 12/31/10 | 12/31/10 |
|---|---|---|---|
| 3 Month T-Bill | 0.2% | 0.1% | 0.1% |
| 5 Year T-Note | 2.1% | 2.0% | 2.0% |
| 10 Year T-Note | 3.4% | 3.3% | 3.3% |
| 30 Year T-Bond | 4.5% | 4.3% | 4.3% |
| 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.
