News & Our Thinking

Weekly Investor

Weekly Investor – November 14, 2011

25 January 2012

European Version of Musical Chairs

Market Summary:  

The major U.S.equity averages finished this past week mixed.  Over recent weeks divergent forces have been colliding, resulting in a wild ride for investors.  On one hand, investors have been getting a dose of surprising resilient economic data domestically.  This past week was no exception with unemployment claims declining, bank loans increasing, and corporate earnings remaining strong. However, this positive news has remained in a constant tug-of-war with Eurozone worries.  This past week was no different as worries over a European contagion dominated the headlines thanks to Italian bond yields surging over the closely watched 7% level.  With governments in flux, yields surging and uncertainty holding a firm grip onEurope, investors can expect the wild ride on Wall Street to continue during the weeks ahead.

The S&P 500® closed up 0.8% for the week.  The top-performing sectors in the S&P 500® Index included Health Care (+2.3%) and Consumer Staples (+1.4%), while bottom-performing sectors included Financials (-0.5%) and Technology (-0.3%).  In the fixed-income market, the 10-year Treasury lost ground with the yield ending the week at 2.1%.

We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.

Capitalizing on Growth

HANSHansen Natural Corp. (HANS) engages in the development, marketing, sale, and distribution of beverages in theUnited Statesand internationally.  Based in Corona, California, HANS  offers natural sodas, fruit juices, fruit smoothies, sparkling beverages, mutli-vitamin juice drinks as well as energy drinks under several brands including Hansen Naturals, Monster Energy, Rumba, Samba, Tango, Peace Tea, Blue Sky, Vidration and Java.

HANS is a dominant player in the energy drink category as its Monster Energy drink brand controls more than 30% market share and has consistently added to its strong position.   The beverage industry has shown signs of stabilization and the energy drink segment is leading the way as the highest growth category in the industry, which we believe are signs that HANS fundamentals will continue to improve.  In addition to stabilizing industry dynamics, HANS’s distribution agreement with Coca-Cola Enterprises is off to an encouraging start and provides strong international growth opportunities.

Top 10 Equity Holdings

MasterCard Inc. 4.9%
Biogen Idec Inc. 4.3%
Qualcomm Inc. 4.1%
Google Inc. 4.1%
Danaher Corp. 4.0%
Jabil Circuit Inc. 3.6%
Hansen Natural Corp. 3.5%
Gilead Sciences Inc. 3.5%
Allergan Inc. 3.5%
EMC Corp. 3.4%

U.S. Equity Indices

Index 11/11/11 Week % Chg YTD % Chg
DJIA 12,153.7 1.4% 5.0%
NASDAQ 2,678.8 -0.3% 1.0%
S&P 500 1,263.9 0.8% 0.5%
Russell 1000 G 590.1 0.3% 2.7%

U.S. Credit Rates

Index 11/11/11 11/04/11 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 2.1% 2.0% 3.3%
30 Year T-Bond 3.1% 3.1% 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.