Weekly Investor – September 10, 2012
A Positive Week
Market Summary:
The major U.S. equity markets ended a two week negative streak by posting positive returns last week. In addition, all ten stock market sectors also posted positive performance. The big rally of the week came on Thursday when Mario Draghi, President of the European Central Bank, proclaimed that an agreement for an unlimited bond-buying program called Outright Monetary Transactions had been reached. This announcement somewhat eased investor tension regarding the Eurozone region and helped drive the market. Investors look forward to this week and hope for more good news.
The S&P 500® closed up 2.2% for the week. The top-performing sectors in the S&P 500® Index included Financials (3.6%) and Basic Materials (3.5%), while bottom-performing sectors included Utilities (-0.7%) and Consumer Staples (0.6%). In the fixed-income market, the 10-year Treasury yield closed flat for the week at 1.7%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
Best in Breed Growth
Schlumberger LTD (SLB) is a global oilfield services company that employs more than 105,000 people in more than 80 countries. Operating through four “GeoMarket” regions, the company’s technologies and services help the world’s largest exploration and production (E&P) companies discover and produce the energy required to fuel the global economy. Founded in 1927 and based in Houston, Texas, SLB’s service portfolio includes some of the most sophisticated drilling, testing and production equipment in the industry.
Many E&P companies curtailed spending during the recession, dampening SLB’s earnings outlook. However, several quarters of higher energy prices and the discovery of large oil resources in Brazil created rising capital expenditure budgets as well as higher demand for energy services. In addition, oil and natural gas are becoming more difficult to find, leading to more complex and expensive exploratory programs and therefore an increased demand for SLB’s services. Argent anticipates that energy companies are beginning a multi-year investment cycle that will highlight the value of SLB’s industry leading services and accelerate the company’s earnings power.
Top 10 Equity Holdings
| . | |
|---|---|
| Google Inc. | 5.1% |
| Biogen Idec Inc. | 5.0% |
| Gilead Sciences Inc. | 4.5% |
| Qualcomm Inc. | 3.9% |
| Danaher Corp. | 3.9% |
| CBS Corp. | 3.8% |
| SunTrust Banks | 3.8% |
| Express Scripts Holdings | 3.7% |
| Forest Laboratories | 3.6% |
| Ebay, Inc. | 3.5% |
U.S. Equity Indices
| Index | 09/07/12 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 13,306.3 | 1.6% | 8.9% |
| NASDAQ | 3,136.4 | 2.3% | 20.4% |
| S&P 500 | 1,437.9 | 2.2% | 14.3% |
| Russell 1000 G | 671.1 | 2.0% | 15.5% |
U.S. Credit Rates
| Index | 09/07/12 | 08/17/12 | 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 | 1.7% | 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.
