News & Our Thinking

Weekly Investor

Weekly Investor – January 17, 2012

14 February 2012

A Quietly Improving Outlook

Market Summary:  

The major U.S. equity averages ended this past week higher thanks to a steady flow of positive economic data.  The positive readings included better-than-expected consumer confidence, money supply, and jobs numbers.  In addition, fear of global inflation continued to lessen thanks to a drop in China’s inflationary readings.  While Eurozone headlines continue to captivate investor focus, the slow and steady improvement seen within theU.S.economy has provided a back drop for better times ahead.  As earnings season gets set to kick into high gear, investors will get a fresh perspective on Corporate America’s outlook.

The S&P 500® closed up +0.9% for the week.  The top-performing sectors in the S&P 500® Index included Basic Materials (+3.9%) and Financials (+3.1%), while bottom-performing sectors included Energy (-1.2%) and Utilities (-0.4%).  In the fixed-income market, the 10-year Treasury closed up for the week at 1.9%.

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

Best-in-Class Growth Incorporated (PCLN) is a leading online travel company.   Founded in 1997 and headquartered in Norwalk,Connecticut, PCLN provides price-disclosed hotel reservation services on a worldwide basis as well as other travel services including retail airline tickets, rental cars, vacations packages, cruise trips and destination services.

Online travel has become increasingly more popular as travelers transition from using traditional travel agents to online services.  The online travel industry has become one of high organic growth, especially among international travel and hotel business segments.  PCLN continues to gain momentum with its international travel offerings and is considered best-in-breed among online hotel business retailers.  Recent concerns over future growth opportunities and macroeconomic pressures have resulted in an attractive valuation for PCLN.  We believe online travel will continue to gain increased market share and we are encouraged by PCLN’s business model, which has the potential to offer attractive upside to investors.

Top 10 Equity Holdings

MasterCard Inc. 4.4%
Biogen Idec Inc. 4.3%
Google Inc. 4.2%
Danaher Corp. 4.0%
Qualcomm Inc. 4.0%
Gilead Sciences Inc. 3.9%
Monster Beverage 3.7%
Jabil Circuit Inc. 3.7%
Allergan Inc. 3.6%
Energizer Holdings 3.5%

U.S. Equity Indices

Index 01/13/12 Week % Chg YTD % Chg
DJIA 12,422.1 0.5% 1.7%
NASDAQ 2,710.7 1.4% 4.1%
S&P 500 1,289.1 0.9% 2.5%
Russell 1000 G 595.2 0.8% 2.5%

U.S. Credit Rates

Index 01/13/12 01/16/12 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 2.9% 3.0% 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.