Weekly Investor – April 18, 2011
Mixed Signals
Market Summary:
The major U.S. equity averages ended the week lower across the board. During the week, mixed earnings results from bellwether companies such as JP Morgan, Google and Bank of America caused investors to take a more cautious stand. On the economic front, we saw mixed signals of lower oil prices while initial jobless claims came in higher than expected. The looming US budget debate and uncertainties regarding the European debt crisis are expected to weigh on the market as we enter the heart of earnings season.
Over the past week, top-performing sectors in the S&P 500® Index included Consumer Staples (+2.0%) and Health Care (+1.6%), while bottom-performing sectors included Energy (-3.1%) and Basic Materials (-2.3%). 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 identifiablecatalysts, and focusing on those stocks with favorable odds.
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Well Positioned to Benefit
Jacobs Engineering Group Inc. (JEC) provides professional, technical, and construction services. Founded in 1947 and headquartered in Pasadena, CA, JEC is one of the largest and most diverse engineering and construction companies in the U.S. Its principal services comprise various aspects of engineering and construction, operations, and maintenance, as well as scientific and specialty consulting services. JEC’s end customers range from oil and gas companies to mining and healthcare companies.
Over the past 18 months, the operating environment of JEC’s customers has steadily improved and JEC is beginning to experience a pick up in orders and overall business. JEC has a strong balance sheet, proven track record and an attractive valuation. As business conditions continue to improve, we at Argent expect JEC to benefit materially from the trickle down effect of the recovering economy. In other words, JEC represents favorable odds for our clients.
Top 10 Equity Holdings
| . | |
|---|---|
| Danaher Corp. | 4.2% |
| Biogen Idec Inc. | 4.0% |
| Qualcomm Inc. | 3.8% |
| EMC Corp. | 3.7% |
| FactSet Research | 3.5% |
| Google Inc. | 3.5% |
| MasterCard Inc. | 3.4% |
| Oracle Corp. | 3.3% |
| Jabil Circuit | 3.3% |
| UnitedHealth Inc. | 3.2% |
U.S. Equity Indices
| Index | 04/15/11 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 12,341.8 | -0.3% | 6.6% |
| NASDAQ | 2,764.7 | -0.6% | 4.2% |
| S&P 500 | 1,319.7 | -0.6% | 4.9% |
| Russell 1000 G | 604.7 | -0.5% | 5.2% |
U.S. Credit Rates
| Index | 04/15/11 | 04/08/11 | 12/31/10 |
|---|---|---|---|
| 3 Month T-Bill | 0.1% | 0.1% | 0.1% |
| 5 Year T-Note | 2.1% | 2.3% | 2.0% |
| 10 Year T-Note | 3.4% | 3.6% | 3.3% |
| 30 Year T-Bond | 4.5% | 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.
