Weekly Investor – November 5, 2012
All Eyes on Sandy
Market Summary:
The hearts and minds of investors were with those affected by Hurricane Sandy, which devastated parts of the U.S. Northeast and closed the U.S. equity markets for two days. Despite a shortened week in which the impact of the storm on the economy and livelihoods of many people added to uncertainty, the equity markets were mixed and generally traded in an orderly fashion. Investors have passed the midway point of third quarter earnings season, and results have been positive on balance but have reinforced trends that we have witnessed for some time, such as pockets of strength in the U.S. economy and concerns over the growth outlook in China. Employment for the week was a mild positive, as the economy added a few more jobs than expected but the employment rate rose to 7.9% due to changes in the participation rate. As investors continue to focus on earnings and the implications of Sandy, the U.S. election and its implications on the direction of policy in the U.S will dominate the headlines.
The S&P 500® closed up 0.2% for the week. The top-performing sectors in the S&P 500® Index included Consumer Discretionary (1.4%) and Industrials (1.4%), while bottom-performing sectors included Utilities (-1.0%) and Energy (1.2%). In the fixed-income market, the 10-year Treasury yield closed down for the week at 1.72%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
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Growing New Markets
Citrix Systems, Inc. (CTXS) develops, sells and supports application delivery products such as GoToMyPc, GoToMeeting, GoToAssist, GoToWebinar and other systems within its online services division. One such way these products work is by transmitting screen pixels, keystrokes and mouse movements by encrypted channel. CTXS’s main application is compatible with any platform, thus allowing for widespread use. Product training is also offered as a service so customers can optimize use of its various solutions.
With its existing remote access business, the company continues to gain momentum. Having completed the acquisition of XenSource, Inc., CTXS is positioned to experience growth in the server and desktop virtualization markets. CTXS is the only company to offer an end-to-end application delivery infrastructure for the delivery of applications to any user. With positive feedback from our Main Street contacts, we believe CTXS will see significant growth from the fast and broad adoption of virtualization. As a result, we believe shares of CTXS can continue to outperform the market and its peers.
Top 10 Equity Holdings
| . | |
|---|---|
| Gilead Sciences Inc. | 5.2% |
| Google, Inc. | 5.1% |
| Lowes Cos. | 4.2% |
| Sun Trust Banks, Inc. | 3.8% |
| Qualcomm Inc. | 3.8% |
| Express Scripts Holdings | 3.8% |
| Danaher Corp. | 3.7% |
| Ebay, Inc. | 3.6% |
| CBS Corp. | 3.5% |
| Forest Laboratories | 3.5% |
U.S. Equity Indices
| Index | 11/02/12 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 13,093.2 | -0.1% | 7.2% |
| NASDAQ | 2,982.1 | -0.2% | 14.5% |
| S&P 500 | 1,414.2 | 0.2% | 12.5% |
| Russell 1000 G | 652.0 | 0.3% | 12.2% |
U.S. Credit Rates
| Index | 11/02/12 | 10/26/12 | 12/30/11 |
|---|---|---|---|
| 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 | 2.9% | 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.
