Weekly Investor – July 18, 2011
More Questions Than Answers
Market Summary:
The major equity averages all posted losses this past week as global uncertainty continued to weigh on sentiment. At home investors’ attention was on the inability of Congress and President Obama to come to an agreement surrounding the debt ceiling. This, coupled with new found fears over an “Italy Contagion,” overshadowed any positive glimpse that may have been provided by the economic data. This positive glimpse included a strong start to earnings season, along with an increase in the closely watched index of leading economic indicators. If there is a silver lining for investors, it’s that many answers will be coming over the weeks ahead to help add clarity one way or the other. Stay Tuned.
Over the past week, top-performing sectors in the S&P 500® Index included Energy (+0.1%) and Utilities (-1.2%), while bottom-performing sectors included Financials (-3.9%) and Industrials (-3.4%). In the fixed-income market, the 10-year Treasury gained ground with the yield ending the week at 2.9%.
We continue to seek those companies possessing identifiablecatalysts, and focusing on those stocks with favorable odds.
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Turning Uncertainty into Opportunity
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
| . | |
|---|---|
| Danaher Corp. | 4.1% |
| MasterCard Inc. | 3.9% |
| Google Inc. | 3.9% |
| Qualcomm Inc. | 3.8% |
| Biogen Idec Inc. | 3.6% |
| UnitedHealth Group | 3.5% |
| EMC Corp. | 3.5% |
| Energizer Holdings | 3.5% |
| Gilead Sciences Inc. | 3.3% |
| Allergan Inc. | 3.3% |
U.S. Equity Indices
| Index | 07/15/11 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 12,479.7 | -1.4% | 7.8% |
| NASDAQ | 2,789.9 | -2.4% | 5.2% |
| S&P 500 | 1,3161.1 | -2.1% | 4.7% |
| Russell 1000 G | 614.4 | -1.8% | 6.9% |
U.S. Credit Rates
| Index | 07/15/11 | 07/08/11 | 12/31/10 |
|---|---|---|---|
| 3 Month T-Bill | 0.1% | 0.1% | 0.1% |
| 5 Year T-Note | 1.4% | 1.6% | 2.0% |
| 10 Year T-Note | 2.9% | 3.0% | 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.
