News & Our Thinking

Weekly Investor

Weekly Investor – January 28, 2013

29 January 2013

Quietly Improving Performance

Market Summary:  

The U.S. equity markets continued their upward climb and ended the week in positive territory.  Positive stock performance was aided by encouraging news from weekly jobless benefits claims which fell to a five year low.  Less encouraging were December existing home sales which declined against expectations of growth.  However, the decline was overshadowed as investors paid close attention to the decision by European banks to repay ECB loans in shares that were larger than expected.  At home, the decision by Congress to delay a vote over the government debt limit until May also impacted the markets.  Finally, earnings season continued with mixed result as Apple (AAPL) lowered its 2013 consensus estimates and the stock dropped significantly.  Investors hope for more positive earnings reports this week.

The S&P 500® closed up 1.1% for the week.  The top-performing sectors in the S&P 500® Index included Consumer Discretionary (2.1%) and Financials (1.8%), while bottom-performing sectors included Consumer Staples (0.7%) and Technology (-0.5%). In the fixed-income market, the 10-year Treasury yield closed down for the week at 1.95%.

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

Google, Inc. 5.1%
Lowes Cos. 4.5%
CBS Corp. 4.1%
Canaher Corp. 4.0%
Allstate 3.8%
SunTrust Banks 3.8%
Ebay, Inc. 3.8%
Qualcomm Inc. 3.7%
Forest Laboratories 3.4%
Gilead Sciences 3.3%

U.S. Equity Indices

Index 01/25/13 Week % Chg YTD % Chg
DJIA 13896.0 1.8% 6.0%
NASDAQ 3149.7 0.5% 4.3%
S&P 500 1503.0 1.1% 5.4%
Russell 1000 G 688.8 0.8% 4.7%

U.S. Credit Rates

Index 01/25/13 01/18/13 12/30/11
3 Month T-Bill 0.1% 0.1% 0.1%
5 Year T-Note 0.9% 0.8% 0.8%
10 Year T-Note 2.0% 1.8% 1.8%
30 Year T-Bond 3.1% 3.0% 3.0%
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.