Weekly Investor – February 27, 2012
The Waiting Game
Market Summary:
The major U.S. equity markets witnessed modest advances last week and U.S. economic data was once again strong. Employment data stole the show as there continues to be evidence of stronger employment and lower unemployment within the U.S. However, investors reacted cautiously to increasing oil prices as the current surge has the potential to lift inflation and therefore slow growth, depressing world stock markets. Additionally, while optimism over a European bailout exists, the failure of a resolution contributed to investor hesitancy. In the midst of mixed signals, investors play the waiting game as they look for outcomes over the next several months.
The S&P 500® closed up 0.3% for the week. The top-performing sectors in the S&P 500® Index included Energy (+1.9%) and Technology (+1.0%), while bottom-performing sectors included Financials (-0.9%) and Consumer Discretionary (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.
New Growth Initiatives
Founded in 1961 and headquartered inNew York,New York, Weight Watchers International, Inc. (WTW) provides weight management services worldwide. WTW offers various services and products that are built upon its weight management plans comprising nutritional, exercise, and behavioral tools and approaches. In addition, WTW provides two internet subscription products, Weight Watchers Online and Weight Watchers eTools.
WTW’s recent operating improvements reflect the implementation of new growth initiatives. A major retail initiative focused on the “new” Weight Watchers seeks to update retail store locations in high traffic locations. Additionally, WTW’s internet business has recently experienced a growth explosion as a result of new eTool offerings and increased social networking. These initiatives produced higher organic growth and profitability for the company. We believe WTW is currently in the early stages of a multi-year growth opportunity, translating into a favorable risk / reward profile for our clients.
Top 10 Equity Holdings
| . | |
|---|---|
| MasterCard Inc. | 4.9% |
| Qualcomm Inc. | 4.2% |
| Jabil Circuit Inc. | 4.1% |
| Biogen Idec Inc. | 4.0% |
| Danaher Corp. | 3.9% |
| Monster Beverage | 3.9% |
| Google Inc. | 3.7% |
| Gilead Sciences Inc. | 3.6% |
| EMC Corp. | 3.5% |
| Energizer Holdings | 3.3% |
U.S. Equity Indices
| Index | 02/24/12 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 12,983.0 | 0.3% | 6.3% |
| NASDAQ | 2,9638.8 | 0.4% | 13.8% |
| S&P 500 | 1,365.7 | 0.3% | 8.6% |
| Russell 1000 G | 643.6 | 0.8% | 10.8% |
U.S. Credit Rates
| Index | 02/24/12 | 02/17/12 | 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% | 2.0% | 3.3% |
| 30 Year T-Bond | 3.1% | 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.
