News & Our Thinking

Weekly Investor

Weekly Investor – July 02, 2012

25 July 2012

Positive Momentum

Market Summary:  

The major U.S. equity markets all posted positive gains for the week.  On Monday worries surrounding the effect of Operation Twist and doubts that a solution for Europe would be reached at the EU Summit drove the markets down.  However, positive economic news which included stronger housing data pushed the markets higher Tuesday and Wednesday.  Thursday, the markets dropped upon the decision of the Supreme Court to uphold the Obama administration’s healthcare plan. Friday investors reacted to the news that European leaders had reached a deal at the EU summit and the markets closed out the last day of the second quarter with positive return of 2.5%, the best performing day of the year thus far.  Investors only hope the positive momentum continues this week.

The S&P 500® closed up 2.0% for the week.  The top-performing sectors in the S&P 500® Index included Energy (4.8%) and Materials (2.8%), while bottom-performing sectors included Consumer Discretionary (0.9%) and Information Technology (0.9%).  In the fixed-income market, the 10-year Treasury yield remained unchanged closing out the week at 1.7%.

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

Building Growth

JECJacobs Engineering Group Inc. (JEC) provides professional, technical, and construction services. Founded in 1947 and headquartered in Pasadena, CA,  JEC is one of the largest and most diverse engineering and construction companies in the U.S.  Its principal services comprise various aspects of engineering and construction, operations, and maintenance, as well as scientific and specialty consulting services. JEC’s end customers range from oil and gas companies to mining and healthcare companies.

Recently, the operating environment of JEC’s customers has steadily improved and JEC is beginning to experience a pick up in orders and overall business.  JEC has a strong balance sheet, proven track record and an attractive valuation.  As business conditions continue to improve, we at Argent expect JEC to benefit materially from the trickle down effect of the recovering economy.  In other words, JEC represents favorable odds for our clients.


Top 10 Equity Holdings

MasterCard Inc. 5.2%
Biogen Idec Inc. 5.0%
Gilead Sciences Inc. 4.1%
Danaher Corp. 3.9%
Lowes Cos. 3.8%
Qualcomm Inc. 3.7%
CBS Corp. 3.6%
Google Inc. 3.6%
EMC Corp. 3.3%
Jabil Circuit Inc. 3.3%

U.S. Equity Indices

Index 06/29/12 Week % Chg YTD % Chg
DJIA 12,880.1 1.9% 5.4%
NASDAQ 2,935.1 1.5% 12.7%
S&P 500 1,362.2 2.0% 8.3%
Russell 1000 G 634.4 1.5% 9.2%

U.S. Credit Rates

Index 06/29/12 06/22/12 12/31/10
3 Month T-Bill 0.1% 0.1% 0.1%
5 Year T-Note 0.7% 0.8% 2.0%
10 Year T-Note 1.7% 1.7% 3.3%
30 Year T-Bond 2.8% 2.8% 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.