Weekly Investor – February 13, 2012
Resilient Markets
Market Summary:
Concerns among investors that government gridlock could keep Greece from obtaining more bailout money turned stocks sharply lower on Friday. This caused the major U.S. averages to close slightly down for the week, ending a winning streak that began at the start of the year. Still, the markets were decidedly less volatile this week. A back drop of an improving economy coupled with attractive valuations and the potential that Europe may pull through its problems helped to provide resilience to this latest Bull rally. Over the weekend, under heavy guard,Greece’s Parliament approved a sweeping and unpopular passage of deep spending cuts. As a result, stock markets around the world, including the U.S., are rallying today, as the way is now cleared for the EU and other entities to provide more money to Greece. This week, amongst a full week of economic data here in theU.S., could provide more fuel for the stock market rally.
The S&P 500® closed down -0.2% for the week. The top-performing sectors in the S&P 500® Index included Technology (+1.3%) and Consumer Staples (+0.3%), while bottom-performing sectors included Financials (-1.2%) and Basic Materials (-2.2%). In the fixed-income market, the 10-year Treasury closed little changed for the week at 2.0%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
Healthy Earnings Power
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 ourMain Street contacts, we believe that UNH offers favorable odds for our clients.
Top 10 Equity Holdings
| . | |
|---|---|
| MasterCard Inc. | 4.8% |
| Gilead Sciences Inc. | 4.3% |
| Qualcomm Inc. | 4.1% |
| Biogen Idec Inc. | 4.1% |
| Jabil Circuit Inc. | 4.0% |
| Danaher Corp. | 3.9% |
| Google Inc. | 3.8% |
| Monster Beverage | 3.7% |
| EMC Corp. | 3.4% |
| Energizer Holdings | 3.3% |
U.S. Equity Indices
| Index | 02/10/12 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 12,801.2 | -0.5% | 4.8% |
| NASDAQ | 2,903.9 | -0.1% | 11.5% |
| S&P 500 | 1,342.6 | -0.2% | 6.8% |
| Russell 1000 G | 630.6 | 0.0% | 8.6% |
U.S. Credit Rates
| Index | 02/10/12 | 02/03/12 | 12/31/10 |
|---|---|---|---|
| 3 Month T-Bill | 0.1% | 0.1% | 0.1% |
| 5 Year T-Note | 0.8% | 0.8% | 2.0% |
| 10 Year T-Note | 2.0% | 1.9% | 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.
