Weekly Investor – October 1, 2012
Worry Continues
Market Summary:
Last week, the S&P 500® experienced its worst weekly decline since June on the heels of continued uncertainty within the Eurozone and weak U.S. economic data. European debt problems remained in the forefront as European leaders continued to disagree on solutions. This weighed on the markets and spurred rioting in Greece and Spain. In the U.S new and pending home sales, GDP and durable goods orders all came in below expectations. Additionally, Philadelphia’s Fed President, Charles Plosser speculated that the new Fed MBS (mortgage backed securities) buy back program would prove ineffective, leaving investors further deflated. However, on the positive side, initial jobless claims and consumer confidence beat expectations while Google Inc. reached an all time high as the company’s earnings prospects continue to improve. While not enough to lift the markets, investors hope for less worry next this week.
The S&P 500® closed down -1.3% for the week. The top-performing sectors in the S&P 500® Index included Utilities (0.9%) and Health Care (-0.3%), while bottom-performing sectors included Technology (-2.4%) and Basic Materials (-1.9%). In the fixed-income market, the 10-year Treasury yield closed down for the week at 1.64%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
Promising Growth Profile
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 our Main Street contacts concerning the company’s pipeline also leads us to believe that shares of AGN represent favorable odds for our clients.
Top 10 Equity Holdings
| . | |
|---|---|
| Google Inc. | 5.5% |
| Gilead Sciences Inc. | 5.0% |
| Biogen Idec Inc. | 4.8% |
| Sun Trust Banks, Inc. | 3.9% |
| Qualcomm Inc. | 3.9% |
| Danaher Corp. | 3.8% |
| CBS Corp. | 3.8% |
| Lowes Cos. | 3.7% |
| Express Scripts Holding | 3.7% |
| Forest Laboratories | 3.6% |
U.S. Equity Indices
| Index | 09/28/12 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 13,437.1 | -1.0% | 10% |
| NASDAQ | 3,116.2 | -2.0% | 19.6% |
| S&P 500 | 1,440.7 | -1.3% | 14.6% |
| Russell 1000 G | 670.3 | -1.6% | 15.4% |
U.S. Credit Rates
| Index | 09/28/12 | 09/21/12 | 12/30/11 |
|---|---|---|---|
| 3 Month T-Bill | 0.1% | 0.1% | 0.1% |
| 5 Year T-Note | 0.6% | 0.7% | 2.0% |
| 10 Year T-Note | 1.6% | 1.8% | 3.3% |
| 30 Year T-Bond | 2.8% | 2.9% | 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.
