Weekly Investor – March 4, 2013
Sequestered
Market Summary:
The U.S. equity markets all posted minimal gains last week despite passing the sequester deadline which could result in $85 billion of spending cuts this year. Additionally, investor confidence was boosted by the housing market as the S&P Chase Shiller Home Price Index posted the largest year-over-year improvement in house prices in 20 cities since before the housing bubble. Across the pond, European markets were shaken when pre-election polls in Italy indicated that a four way presidential race would end with a divided parliament. Looking ahead, investors will keep a watchful eye on upcoming economic releases for potential collateral damage of the sequester and increased payroll taxes for all Americans.
The S&P 500® closed down 0.3% for the week. The top-performing sectors in the S&P 500® Index included Telecommunications (1.5%) and Consumer Discretionary (1.4%), while bottom-performing sectors included Technology (-0.3%) and Financials (-0.5%). In the fixed-income market, the 10-year Treasury yield closed down for the week at 1.8%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
High Growth Potential
Procter & Gamble (PG) engages in the manufacture and sale of a range of branded consumer packaged goods. The company operates in five segments: Beauty, Grooming, Health Care, Fabric Care and Home Care, and Baby Care and Family Care. PG was founded in 1837 and is based in Cincinnati, Ohio.
For the past couple of years, PG has underperformed its peer group, losing share and posting anemic growth across its portfolio. In an effort to turn things around, management announced a major restructuring at the company with an emphasis on improving returns and restoring growth in its key brands. While we remain in the early days of progress, early signs have been particularly encouraging. We believe that an improving company outlook combined with both an attractive dividend yield and valuation offer favorable odds for our clients.
Top 10 Equity Holdings
| . | |
|---|---|
| Google, Inc. | 5.4% |
| Lowes Cos. | 4.4% |
| CBS Corp. | 4.2% |
| Allstate | 4.0% |
| Danaher Corp. | 4.0% |
| Qualcomm Inc. | 3.8% |
| Oracle Corp. | 3.7% |
| Ebay, Inc. | 3.6% |
| Gilead Sciences | 3.6% |
| Suntrust Banks | 3.5% |
U.S. Equity Indices
| Index | 03/01/13 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 14,089.7 | 0.6% | 7.5% |
| NASDAQ | 3,169.7 | 0.3% | 5.0% |
| S&P 500 | 1,515.2 | 0.2% | 6.5% |
| Russell 1000 G | 694.6 | 0.4% | 5.5% |
U.S. Credit Rates
| Index | 03/01/13 | 02/22/13 | 12/31/12 |
|---|---|---|---|
| 3 Month T-Bill | 0.1% | 0.1% | 0.1% |
| 5 Year T-Note | 0.7% | 0.8% | 0.8% |
| 10 Year T-Note | 1.8% | 2.0% | 1.8% |
| 30 Year T-Bond | 3.1% | 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.
