Weekly Investor – March 12, 2012
Mixed Signals Amid Global Uncertainty
Market Summary:
The major U.S. equity markets remained relatively unchanged last week. For the second week in a row U.S. economic data was unusually strong. Unemployment and non-manufacturing PMI data stood out while housing continues to show marked improvement. However, equity trading on Tuesday was relatively dramatic as S&P 500 suffered its worst one-day drop in almost three months. The action came on the heels of weak action abroad, where markets remained concerned about the implications of slower growth inChina, macroeconomic concerns surrounding the Eurozone and uncertain terms in the Greek debt swap. In the end investors remain cautious as the tension between an improving U.S. economy and global uncertainty rages on.
The S&P 500® closed up 0.1% for the week. The top-performing sectors in the S&P 500® Index included Telecommunications Services (+1.5%) and Consumer Discretionary (+1.0%), while bottom-performing sectors included Basic Materials (-1.7%) and Energy (-1.0%). 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.
Favorable Odds
Allergan, Inc. (AGN) was founded in 1948 and is presently headquartered inIrvine,California. AGN discovers, develops and commercializes medical devices, pharmaceuticals and additional products for numerous specialty medical markets such as neurology, medical aesthetics, dermatology and urology. The company’s pharmaceutical segment is responsible for the ever trendy Botox. Popular medical devices include the Lap-Band System as well as additional aesthetic products for augmentations and enhancements.
Due to an improving outlook for several of AGN’s key franchises, including Botox, the company’s growth profile remains a stand out among its pharmaceutical peers. Coupled with FDA approval of an expanded indication for Botox as a treatment for migraine headaches, we have added confidence that AGN can maintain its better than average growth profile. In addition, encouraging feedback from ourMain Streetcontacts concerning the company’s pipeline also leads us to believe that shares of AGN represent favorable odds for our clients.
Top 10 Equity Holdings
| . | |
|---|---|
| MasterCard Inc. | 4.9% |
| Qualcomm Inc. | 4.1% |
| Jabil Circuit Inc. | 4.1% |
| Biogen Idec Inc. | 4.1% |
| Monster Beverage | 4.0% |
| Danaher Corp. | 3.9% |
| Google Inc. | 3.6% |
| Gilead Sciences Inc. | 3.6% |
| EMC Corp. | 3.6% |
| CBS Corp. | 3.2% |
U.S. Equity Indices
| Index | 03/09/12 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 12,922.0 | -0.4% | 5.8% |
| NASDAQ | 2,988.3 | 0.4% | 14.7% |
| S&P 500 | 1,370.9 | 0.1% | 9.0% |
| Russell 1000 G | 645.7 | 0.1% | 11.2% |
U.S. Credit Rates
| Index | 03/09/12 | 03/02/12 | 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.
