Weekly Investor – February 21, 2012
Slow and Steady
Market Summary:
The major U.S. equity markets witnessed modest gains last week as U.S. economic data was once again strong. Unemployment claims declined while the Empire/Philly Fed manufacturing readings showed improvement. In addition, General Motors announced solid earnings although largely on the backs of declining wages and benefits. At the same time, China’s officials expressed their intent to expand their country’s investment in Europe which helped bolster confidence in the precarious Eurozone asGreece’s parliament approved austerity measures the prior weekend. Investors remain cautious on Europe as Greece bailout efforts continue.
The S&P 500® closed up 1.4% for the week. The top-performing sectors in the S&P 500® Index included Energy (+2.2%) and Technology (+1.7%), while bottom-performing sectors included Basic Materials (0.8%) and Utilities (0.3%). In the fixed-income market, the 10-year Treasury closed with little change for the week at 2.0%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
Strong Execution in Challenging Environment
Varian Medical Systems, Inc. (VAR) is a leader in radiation therapy and oncology treatment. The company designs, manufactures, sells and services equipment and software products used to treat cancer with radiation, operating in two segments: Oncology Systems and X-ray Products.
Over the past 18 months, VAR’s stock has become more attractive from a valuation standpoint as large capital equipment purchases by hospitals have been negatively affected by a host of budgetary issues. Despite the challenging environment, VAR has continued to take market share from competitors along the way and strengthen its leading position. With hospital spending beginning to stabilize and VAR’s competitive position even stronger today, we feel an investment in VAR offers favorable odds for our clients.
Top 10 Equity Holdings
| . | |
|---|---|
| MasterCard Inc. | 4.8% |
| Jabil Circuit Inc. | 4.2% |
| Qualcomm Inc. | 4.2% |
| Biogen Idec Inc. | 4.0% |
| Danaher Corp. | 3.9% |
| Gilead Sciences Inc. | 3.8% |
| Google Inc. | 3.7% |
| Monster Beverage | 3.7% |
| EMC Corp. | 3.5% |
| Energizer Holdings | 3.3% |
U.S. Equity Indices
| Index | 02/17/12 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 12,949.9 | 1.2% | 6.0% |
| NASDAQ | 2,951.8 | 1.6% | 13.3% |
| S&P 500 | 1,361.2 | 1.4% | 8.2% |
| Russell 1000 G | 638.8 | 1.3% | 10.0% |
U.S. Credit Rates
| Index | 02/17/12 | 02/10/12 | 12/31/10 |
|---|---|---|---|
| 3 Month T-Bill | 0.1% | 0.1% | 0.1% |
| 5 Year T-Note | 0.9% | 0.8% | 2.0% |
| 10 Year T-Note | 2.0% | 2.0% | 3.3% |
| 30 Year T-Bond | 3.2% | 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.
