Weekly Investor – March 14, 2011
Tragedy Amidst Global Uncertainty
Market Summary:
The major U.S. equity averages all closed lower last week as tragedy, continued global protest and signs of economic slowing in China gripped the market. The world was focused on Japan following the devastating natural disaster that will impact the region for years to come. In addition, intensifying conflicts in Libya and headlines of unrest in Saudi Arabia added to investors’ cautionary mood. On the economic front, several signs of a potential slowdown in China weighed on the markets as well, including a decline in China’s CPI, a drop in China’s wholesale food price index, and declining car sales. In the end, the many headlines simply proved too much for investors and the tension between an improving U.S. economy and global uncertainty raged on.
Over the past week, top-performing sectors in the S&P 500® Index included Utilities (+1.5%) and Telecomm (+1.1%), while bottom-performing sectors included Energy (-4.0%) and Basic Materials (-3.1%). In the fixed-income market, the 10-year Treasury gained 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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A Market Share Winner
Hansen Natural Corp. (HANS) engages in the development, marketing, sale, and distribution of beverages in the United States and internationally. Based in Corona, California, HANS offers natural sodas, fruit juices, fruit smoothies, sparkling beverages, mutli-vitamin juice drinks as well as energy drinks under several brands including Hansen Naturals, Monster Energy, Rumba, Samba, Tango, Peace Tea, Blue Sky, Vidration and Java.
HANS is a dominant player in the energy drink category as its Monster Energy drink brand controls more than 30% market share and has consistently added to its strong position. The beverage industry has shown signs of stabilization and the energy drink segment is leading the way as the highest growth category in the industry, which we believe are signs that HANS’s fundamentals will continue to improve. In addition to stabilizing industry dynamics, HANS’s distribution agreement with Coca-Cola Enterprises is off to an encouraging start and provides strong international growth opportunities. With an attractive valuation and improving growth prospects, HANS offers an attractive profile for our clients.
Top 10 Equity Holdings
| . | |
|---|---|
| Danaher Corp. | 4.1% |
| Google Inc. | 3.9% |
| Qualcomm Inc. | 3.8% |
| EMC Corp. | 3.7% |
| FactSet Research | 3.5% |
| Jabil Circuit Inc. | 3.5% |
| Biogen Idec Inc. | 3.5% |
| Maxim Integrated | 3.3% |
| MasterCard Inc. | 3.3% |
| Carnival Corp. | 3.3% |
U.S. Equity Indices
| Index | 03/11/11 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 12,044.4 | -1.0% | 4.0% |
| NASDAQ | 2,715.6 | -2.5% | 2.4% |
| S&P 500 | 1,304.3 | -1.3% | 3.7% |
| Russell 1000 G | 594.9 | -1.9% | 3.5% |
U.S. Credit Rates
| Index | 03/11/11 | 03/04/11 | 12/31/10 |
|---|---|---|---|
| 3 Month T-Bill | 0.1% | 0.1% | 0.1% |
| 5 Year T-Note | 2.0% | 2.2% | 2.0% |
| 10 Year T-Note | 3.4% | 3.5% | 3.3% |
| 30 Year T-Bond | 4.6% | 4.6% | 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.
