Weekly Investor – March 18, 2013
All Eyes on Cyprus
Market Summary:
The U.S. equity markets all continued their positive climb despite an interesting series of events throughout the week. The Dow reached an all time high on Thursday before falling Friday. The Fed performed stress tests on our nation’s banks and results were relatively positive. However, the big news of the week came after Friday’s close when European finance ministers attempted to bail out Cyprus’s banks. The ministers would like to force Cypriot depositors to share in the bail out costs by taking a cut on deposits. Some fear this will weaken other European banks which have already been impacted by the ongoing crisis. Going forward, investors will keep a watchful eye for any market impact resulting from the situation in Cyprus.
The S&P 500® closed up 0.6% for the week. The top-performing sectors in the S&P 500® Index included Financials (1.4%) and Utilities (1.2%), while bottom-performing sectors included Consumer Staples (-0.1%) and Telecommunications (-0.5%). 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.
Accelerating Growth
Quanta Services, Inc. provides specialty contracting services primarily in North America. Founded in 1997 and headquartered in Houston, Texas, PWR designs, installs and maintains electric power transmission and distribution networks for the electric power industry; designs, installs and maintains natural gas and oil transmission and distribution systems for the natural gas industry; and designs, installs and maintains fiber optic, copper, coaxial cable and wireless communications networks for communications carriers.
As the largest utility contractor in the United States, PWR is benefiting from government incentives to rebuild the electricity grid after years of under-investment. In addition, PWR’s pipeline construction business is benefiting from the need to move recently discovered shale gas and oil around the country. With the combination of accelerating earnings growth and the stock trading below its historical valuation, we believe that PWR offers favorable odds for our clients.
Top 10 Equity Holdings
| . | |
|---|---|
| Google, Inc. | 5.3% |
| CBS Corp. | 4.4% |
| Lowes Cos. | 4.4% |
| Allstate | 4.1% |
| Danaher Corp. | 4.0% |
| Oracle Corp. | 3.8% |
| Gilead Sciences | 3.7% |
| Qualcomm Inc. | 3.7% |
| Suntrust Banks | 3.6% |
| Procter & Gamble | 3.4% |
U.S. Equity Indices
| Index | 03/15/13 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 14,514.1 | 0.8% | 10.8% |
| NASDAQ | 3,249.1 | 0.1% | 7.6% |
| S&P 500 | 1,560.7 | 0.6% | 9.4% |
| Russell 1000 G | 710.5 | 0.3% | 8.0% |
U.S. Credit Rates
| Index | 03/15/13 | 03/08/13 | 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.
