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News & Our Thinking

Weekly Investor

Weekly Investor – April 22, 2013

23 April 2013

Pullback

Market Summary:  

The U.S. equity markets lost ground last week due in part to a bevy of negative reports.  Slower-than-expected Chinese GDP growth, a negative reading for the U.S. leading indicators index and feeble corporate earnings announcements depressed the markets.  However, there were some bright spots which boosted investor sentiment, both industrial production and housing starts data were positive.  Additionally, Google Inc. (GOOG) announced strong search growth and better pricing trends which boosted its shares.  Looking ahead, investors prepare to digest more news from Corporate America and eagerly await Friday’s announcement of first quarter U.S. GDP.  Both will be telltale signs for market direction.

The S&P 500® down 2.1% for the week.  The top-performing sectors in the S&P 500® Index included Telecommunications (1.2%) and Utilities (1.0%), while bottom-performing sectors included Energy (-4.1%) and Technology       (-4.1%). In the fixed-income market, the 10-year Treasury yield closed even for the week at 1.7%.

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


Best-in-Class

WSMWilliams-Sonoma, Inc. (WSM) operates as a specialty retailer of home products, offering culinary and entertaining products as well as home furnishings.  The company was founded in 1956 and is headquartered in San Francisco, California.  As of January 2012,  WSM operated 576 stores under its well-known brands which include Williams-Sonoma, Pottery Barn, Pottery Barn Kids, West Elm, and Rejuvenation.

WSM is a best-in-class retailer operating under a business model which combines both leading online and in-store retail experiences.  Additionally, a turnaround strategy within the company’s flagship Williams-Sonoma brand has proved successful, leading to an improved outlook for WSM.  This success, along with continued strength in its other growth brands, namely Pottery Barn and West Elm, provide WSM the opportunity for accelerated growth going forward.  We believe WSM’s strong execution, improving outlook and current valuation offer favorable odds to our clients.

Top 10 Equity Holdings


.
Google, Inc. 5.3%
Gilead Sciences 4.4%
CBS Corp 4.4%
Lowes Cos. 4.4%
Allstate 4.2%
Danaher Corp. 3.8%
Procter & Gamble 3.7%
Qualcomm Inc. 3.7%
SunTrust Banks, Inc. 3.6%
Oracle Corp. 3.4%

U.S. Equity Indices


Index 04/19/13 Week % Chg YTD % Chg
DJIA 14,547.5 -2.1% 11.0%
NASDAQ 3,206.1 -2.7% 6.2%
S&P 500 1,555.3 -2.1% 9.0%
Russell 1000 G 710.5 -2.1% 8.0%

U.S. Credit Rates


Index 04/19/13 04/12/13 12/31/12
3 Month T-Bill 0.1% 0.1% 0.1%
5 Year T-Note 0.7% 0.7% 0.8%
10 Year T-Note 1.7% 1.7% 1.8%
30 Year T-Bond 2.9% 2.9% 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.