News & Our Thinking

Weekly Investor

Weekly Investor – February 11, 2013

12 February 2013

Some Volatility Returns

Market Summary:  

The U.S. equity markets ended the week mixed as some volatility returned to the markets.  Better than expected ISM Non-manufacturing numbers and strong trade data from China helped stocks.  European stocks also rallied on Tuesday but were later hurt by European Central Bank President Draghi’s concerns about a strong Euro and further political uncertainty in Italy and Spain. At home earnings season continued and of the 341 companies that have reported, 67% are ahead of revenue expectations. With the mixed week in the rear view mirror, investors look ahead to President Obama’s State of the Union Address and more economic data.

The S&P 500® closed up 0.3% for the week.  The top-performing sectors in the S&P 500® Index included Consumer Staples (0.8%) and Technology (0.6%), while bottom-performing sectors included Basic Materials (-0.3%) and Telecommunications (-0.4%). In the fixed-income market, the 10-year Treasury yield closed down for the week at 1.9%.

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

Favorable Odds

LOWLowe’s Companies, Inc. (LOW) operate as a home improvement retailer. The company offers a range of products for repair, remodeling, home decorating, and property maintenance.

LOW’s has recently implemented a new strategy that focuses on slowing store growth and improving store productivity and margins.  LOW’s also plans to return capital back to investors through substantial share buyback offers. We believe the new strategy will be successful and offers an attractive risk / reward profile for our portfolio.

Top 10 Equity Holdings

Google, Inc. 5.3%
Lowes Cos. 4.5%
CBS Corp. 4.1%
Danaher Corp. 3.9%
Allstate 3.9%
Qualcomm Inc. 3.9%
Ebay, Inc. 3.7%
SunTrust Banks, Inc. 3.7%
Oracle Corp. 3.7%
Gilead Sciences 3.4%

U.S. Equity Indices

Index 02/08/13 Week % Chg YTD % Chg
DJIA 13,993.0 -0.1% 6.8%
NASDAQ 3193.9 0.5% 5.8%
S&P 500 1,517.9 0.3% 6.4%
Russell 1000 G 696.1 0.4% 5.8%

U.S. Credit Rates

Index 02/08/13 02/01/13 12/30/11
3 Month T-Bill 0.1% 0.1% 0.1%
5 Year T-Note 0.8% 0.9% 0.8%
10 Year T-Note 1.9% 2.0% 1.8%
30 Year T-Bond 3.2% 3.2% 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.