Weekly Investor – September 06, 2011
It’s All About the Numbers
Market Summary:
While the major U.S equity averages finished this past week virtually unchanged, the broad-based declines on Friday that have garnered all the attention. Friday’s weakness was the result of yet another disappointing economic data point – jobs data, which indicated no growth. Along with weak manufacturing data, this simply proved too much for investors to ignore. Pressure is certainly mounting ahead of President Obama’s Congressional address this Thursday. Investors will have all ears open for any sound of a credible plan to kick start economic growth. With uncertainty growing every day, investors can expect the equity markets to continue their volatile ride.
The S&P 500® closed the weekly slightly lower, down 0.2% for the week. The top-performing sectors in the S&P 500® Index included Utilities (+0.9%) and Health Care (+0.6%), while bottom-performing sectors included Financials (-1.9%) and Telecommunications (-1.5%). In the fixed-income market, the 10-year Treasury gained ground with the yield ending the week at 2.0%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
Growth in the Right Places
Founded in 1879 and based in San Ramon, California, Chevron Corporation (CVX) engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. It operates in two segments, Upstream, which involves the exploration, development and production of crude oil and natural gas and Downstream, which engages in the refining of crude oil into petroleum products. The company was formerly known as ChevronTexaco Corp. and changed its name to Chevron Corporation in May 2005.
Although CVX’s production growth forecast is muted over the next few years, we believe the anticipated addition of two natural gas fields inAustraliaduring 2015 will change CVX’s growth profile dramatically. The change in production from these fields, as well as other projects CVX is undertaking, should drive a re-rating of the company to peer levels. The combination of higher production and the potential for higher valuation give Argent confidence that CVX represents favorable odds for our clients.
Top 10 Equity Holdings
| . | |
|---|---|
| MasterCard Inc. | 4.7% |
| Qualcomm Inc. | 3.9% |
| Google Inc. | 3.9% |
| Biogen Idec Inc. | 3.8% |
| Danaher Corp. | 3.8% |
| Gilead Sciences Inc. | 3.8% |
| Energizer Holdings | 3.7% |
| Allergan Inc. | 3.6% |
| Hansen Natural Corp. | 3.5% |
| EMC Corp. | 3.3% |
U.S. Equity Indices
| Index | 09/02/11 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 11,240.3 | -0.4% | -2.9% |
| NASDAQ | 2,480.3 | -0.0% | -6.5% |
| S&P 500 | 1,174.0 | -0.2% | -6.7% |
| Russell 1000 G | 550.2 | 0.0% | -4.3% |
U.S. Credit Rates
| Index | 09/02/11 | 08/26/11 | 12/31/10 |
|---|---|---|---|
| 3 Month T-Bill | 0.1% | 0.1% | 0.1% |
| 5 Year T-Note | 0.9% | 0.9% | 2.0% |
| 10 Year T-Note | 2.0% | 2.2% | 3.3% |
| 30 Year T-Bond | 3.2% | 3.5% | 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.
