Weekly Investor – February 25, 2013
A Volatile Week
Market Summary:
The U.S. equity markets ended the holiday shortened week mostly down. The S&P 500® Index experienced its largest two-day drop since November upon the release of the Federal Reserve’s minutes. The minutes indicated that officials are doubtful about continuing the central bank’s economic stimulus. Additionally, many investors were surprised by the performance of gold which dropped 11.8% from its 52 week high. Turning to the markets, Apple (AAPL) investor David Einhorn of Greenlight Capital succeeded in his legal effort to prevent AAPL from holding a vote on a proposal which would limit the company’s ability to issue preferred stock. Finally, next week marks the official end to earnings season and investors hope for a last bit of positive news.
The S&P 500® closed down 0.3% for the week. The top-performing sectors in the S&P 500® Index included Consumer Staples (1.7%) and Telecommunications (1.4%), while bottom-performing sectors included Consumer Discretionary (-1.4%) and Basic Materials (-3.0%). In the fixed-income market, the 10-year Treasury yield closed even for the week at 2.0%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
High Growth Potential
Oracle Corp. (ORCL) is a leading provider of database software – programs that allow the storage of large amounts of information while also having the capacity to search, retrieve, sort, revise, analyze and order data, both quickly and efficiently. ORCL has completed a handful of acquisitions, which as a result has enhanced its market share and its ability to gain additional market share going forward.
With its dominate position in database management as an anchor, ORCL has successfully branched out into successive fast growing areas of technology services over the last decade. Most recently ORCL launched new products and services that enable its clients to migrate an internal IT environment into cloud computing. We believe the market currently underestimates ORCL’s growth potential over the next few years and therefore represents favorable odds for our clients.
Top 10 Equity Holdings
| . | |
|---|---|
| Google, Inc. | 5.4% |
| Lowes Cos. | 4.3% |
| CBS Corp. | 4.2% |
| Allstate | 4.1% |
| Danaher Corp. | 4.0% |
| Qualcomm Inc. | 3.8% |
| Oracle Corp. | 3.7% |
| Ebay, Inc. | 3.7% |
| SunTrust Banks, Inc. | 3.6% |
| Gilead Sciences | 3.5% |
U.S. Equity Indices
| Index | 02/22/13 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 14,000.6 | 0.1% | 6.8% |
| NASDAQ | 3,161.8 | -0.9% | 4.7% |
| S&P 500 | 1,515.6 | -0.3% | 6.3% |
| Russell 1000 G | 691.6 | -0.4% | 5.1% |
U.S. Credit Rates
| Index | 02/22/13 | 02/15/13 | 12/31/12 |
|---|---|---|---|
| 3 Month T-Bill | 0.1% | 0.1% | 0.1% |
| 5 Year T-Note | 0.8% | 0.9% | 0.8% |
| 10 Year T-Note | 2.0% | 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.
