Weekly Investor – May 23, 2011
Glass Half Empty of Half Full?
Market Summary:
The major U.S equity averages ended this past week lower as May continues its reputation as a difficult month for investors. The economy remains the main focus and what was once a steady stream of bullish readings has turned into a drum beat of softening tones. This past week’s readings included a weakening in the Leading Economic Indicators along with a yielding unemployment claims number. In addition, housing remains a drag. Time will tell if this soft patch will change course as we head into the second half of the year. On the positive side, the commodity pressures that had been receiving so much attention have continued their correction. With prices at the pump starting to fall and oil remaining under the $100 per barrel level, consumers may receive an added boost just in the nick of time.
Over the past week, top-performing sectors in the S&P 500® Index included Energy (+0.9%) and Consumer Staples (+0.6%), while bottom-performing sectors included Technology (-1.5%) and Industrials (-0.9%). In the fixed-income market, the 10-year Treasury gained ground ending the week with the yield ending at 3.1%.
We continue to seek those companies possessing identifiablecatalysts, and focusing on those stocks with favorable odds.
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New Product Cycle
NVIDIA Corp. (NVDA) provides visual computing technologies that generate interactive graphics on workstations, personal computers, game consoles and mobile devices. NVDA was founded in 1993 and is headquartered in Santa Clara, California.
Recently, NVDA successfully launched a new line of graphics chips that reversed a two year trend of market share loss. In addition, NVDA is experiencing favorable adoption for its second generation Tegra chip, designed specifically for wireless mobile devices such as smartphones and tablets. Given Tegra’s market leadership and the potential its conservative multi-year plan has relative to the increasing popularity and demand for smartphones and tablets, we believe NVDA has the potential to outperform expectations. Furthermore, we believe NVDA’s current valuation does not fully reflect the sale and profit growth potential of the company, creating upside potential or favorable odds for our clients.
Top 10 Equity Holdings
| . | |
|---|---|
| Danaher Corp. | 4.1% |
| Qualcomm Inc. | 3.9% |
| EMC Corp. | 3.6% |
| FactSet Research | 3.5% |
| Biogen Idec Inc. | 3.4% |
| MasterCard Inc. | 3.4% |
| UnitedHealth Inc. | 3.4% |
| Energizer Holdings | 3.4% |
| Gilead Sciences Inc. | 3.3% |
| Jabil Circuit Inc. | 3.3% |
U.S. Equity Indices
| Index | 05/20/11 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 12,512.0 | -0.7% | 8.1% |
| NASDAQ | 2,803.3 | -0.9% | 5.7% |
| S&P 500 | 1,333.3 | -0.3% | 6.0% |
| Russell 1000 G | 613.2 | -0.6% | 6.7% |
U.S. Credit Rates
| Index | 05/20/11 | 05/13/11 | 12/31/10 |
|---|---|---|---|
| 3 Month T-Bill | 0.1% | 0.0% | 0.1% |
| 5 Year T-Note | 1.8% | 1.8% | 2.0% |
| 10 Year T-Note | 3.1% | 3.2% | 3.3% |
| 30 Year T-Bond | 4.3% | 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.
