Weekly Investor – September 12, 2011
All Eyes Are Watching Europe
Market Summary:
U.S. Stocks slumped, as the S&P 500® declined 2.7% on Friday and 1.7% for the week. Tenuous fiscal and financial conditions inEuropecontinue to carry the lion’s share of the blame but other bad news arose during the week as well. Stocks were pressured on Thursday in response to a perceived lack of political leadership and some skepticism that President Obama’s jobs plan will achieve the desired result. Another weekly initial jobless claim above 400,000 and the failure of European Central Bank President Trichet to offer up plans intended to stimulate growth in the region also contributed to the slump. On a positive front, the ISM Services index reported an increase in September but it was not enough to tip the scale away from the volume of negative news.
The S&P 500® closed down (-1.7%) for the week. The top-performing sectors in the S&P 500® Index included Technology (-0.5%) and Consumer Staples (-1.3%), while bottom-performing sectors included Financials (-2.6%) and Basic Materials (-2.4%). In the fixed-income market, the 10-year Treasury gained ground with the yield ending the week at 1.9%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
Growth of Virtual Platform Leads to Real Profit Growth
Citrix Systems, Inc. (CTXS) develops, sells and supports application delivery products such as GoToMyPc, GoToMeeting, GoToAssist, GoToWebinar and other systems within its online services division. One such way these products work is by transmitting screen pixels, keystrokes and mouse movements by encrypted channel. CTXS’s main application is compatible with any platform, thus allowing for widespread use. Product training is also offered as a service so customers can optimize use of its various solutions.
With its existing remote access business, the company continues to gain momentum. Having completed the acquisition of XenSource, Inc., CTXS is positioned to experience growth in the server and desktop virtualization markets. CTXS is the only company to offer an end-to-end application delivery infrastructure for the delivery of applications to any user. With positive feedback from our Main Street contacts, we believe CTXS will see significant growth from the fast and broad adoption of virtualization. We believe shares of CTXS can out perform the market and its peers.
Top 10 Equity Holdings
| . | |
|---|---|
| MasterCard Inc. | 4.7% |
| Qualcomm Inc. | 4.0% |
| Google Inc. | 3.9% |
| Danaher Corp. | 3.8% |
| Biogen Idec Inc. | 3.8% |
| Gilead Sciences Inc. | 3.7% |
| Hansen Natural Corp. | 3.6% |
| Allergan Inc. | 3.6% |
| Energizer Holdings | 3.6% |
| Maxim Integrated | 3.3% |
U.S. Equity Indices
| Index | 09/09/11 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 10,992.1 | -2.2% | -5.1% |
| NASDAQ | 2,468.0 | -0.5% | -7.0% |
| S&P 500 | 1,154.2 | -1.7% | -8.2% |
| Russell 1000 G | 542.2 | -1.5% | -5.7% |
U.S. Credit Rates
| Index | 09/09/11 | 09/02/11 | 12/31/10 |
|---|---|---|---|
| 3 Month T-Bill | 0.1% | 0.1% | 0.1% |
| 5 Year T-Note | 0.8% | 0.9% | 2.0% |
| 10 Year T-Note | 1.9% | 2.0% | 3.3% |
| 30 Year T-Bond | 3.3% | 3.2% | 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.
