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News & Our Thinking

Weekly Investor

Weekly Investor – August 6, 2012

17 August 2012

Some Good News

Market Summary:  

The major U.S. equity markets ended the week in positive territory after the markets rallied Friday.  European equities rallied to their highest levels since April upon speculation that policy makers will take action to ease the debt crisis.  U.S. economic data helped the rally as both manufacturing and private payrolls had significant upside surprises.  However, the main catalyst for positive U.S. market performance was the change in nonfarm U.S. payrolls, which beat consensus estimates.  Earnings season continued with mixed results for the week and investors hope the good news persists.

The S&P 500® closed up 0.4% for the week.  The top-performing sectors in the S&P 500® Index included Information Technology (1.5%) and Telecommunications (0.6%), while bottom-performing sectors included Utilities (-0.7%) and Health Care (-1.0%).  In the fixed-income market, the 10-year Treasury yield had a slight gain closing out the week at 1.6%.

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


A New Business Model

PCLNPriceline.com Incorporated (PCLN) is a leading online travel company.   Founded in 1997 and headquartered inNorwalk, 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. 5.1%
Biogen Idec Inc. 5.0%
Gilead Sciences Inc. 4.5%
Qualcomm Inc. 4.0%
Danaher Corp. 3.9%
Google Inc. 3.9%
CBS Corp. 3.8%
Express Scripts Holding Co. 3.5%
Jabil Circuit, Inc. 3.5%
EMC Corp. 3.4%

U.S. Equity Indices


Index 08/03/12 Week % Chg YTD % Chg
DJIA 13,096.2 0.2% 7.2%
NASDAQ 2,967.9 0.3% 13.9%
S&P 500 1,391.0 0.4% 10.6%
Russell 1000 G 647.6 0.3% 11.5%

U.S. Credit Rates


Index 08/03/12 07/27/12 12/30/11
3 Month T-Bill 0.1% 0.1% 0.1%
5 Year T-Note 0.7% 0.7% 2.0%
10 Year T-Note 1.6% 1.6% 3.3%
30 Year T-Bond 2.6% 2.6% 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.