News & Our Thinking

Weekly Investor

Weekly Investor – April 30, 2012

07 June 2012

An Apple a Day

Market Summary:  

The major U.S. equity markets all gained positive ground last week.  While U.S. economic data remains mixed, the biggest positives last week were the continued improvement in housing, signs from the Fed that simulative policies will persist and a notable package of earnings data.  The biggest negative for the U.S. was the significant increase in unemployment claims. However, the highlight of last week’s market was Apple’s (AAPL) earnings announcement. The company reported that sales were up 88% from the previous year and CEO, Tim Cook attributed the impressive growth to a strong Chinese market.  Despite the positive news, investors still seemed focused on issues in Spain and greaterEurope as they seek an answer to their debt situation.

The S&P 500® closed up 1.8% for the week.  The top-performing sectors in the S&P 500® Index included Telecommunications (4.4%) and Consumer Discretionary (2.8%), while bottom-performing sectors included Health Care (0.7%) and Consumer Staples (-0.2%).  In the fixed-income market, the 10-year Treasury yield remained unchanged, closing out the week at 2.0%.

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

Improving Fundamentals

ebayeBay, Inc. (EBAY) and its subsidiaries provide online marketplaces for the sale of goods and services and online payments services, including PayPal and BillMeLater, to individuals and businesses in the United States and internationally.

Over the past year, EBAY has orchestrated a revitalization of its online auction offerings while continuing to generate impressive growth in its payment services business.  While some of the company results have been masked by the overall economic pressures, EBAY has shown improvements in several key operating metrics.  With the company’s online auction restructuring on track and a management team focused on restoring growth to the company, we are encouraged by EBAY’s progress and a strategy that has the potential to offer attractive upside to investors.

Top 10 Equity Holdings

MasterCard Inc. 5.2%
Biogen Idec Inc. 4.4%
Monster Beverage 4.3%
Qualcomm Inc. 4.0%
Gilead Sciences Inc. 4.0%
Danaher Corp. 3.9%
Google Inc. 3.6%
Jabil Circuit Inc. 3.6%
CBS Corp. 3.5%
EMC Corp. 3.4%

U.S. Equity Indices

Index 04/27/12 Week % Chg YTD % Chg
DJIA 13,228.3 1.5% 8.3%
NASDAQ 3,069.2 2.3% 17.8%
S&P 500 1,403.4 1.8% 11.6%
Russell 1000 G 665.5 2.0% 14.6%

U.S. Credit Rates

Index 04/27/12 04/20/12 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 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.