Weekly Investor – June 17, 2013
Trouble in Asia?
Market Summary:
The U.S. equity markets all fell last week upon a bevy of mixed economic reports. June Consumer Confidence fell 1.8% and reports showed that May Industrial Production was flat against expectations of an increase. In contrast, May advance retails sales beat expectations and speculation that the Fed would take additional measures to continue quantitative easing pushed markets higher. However, the positive reports were not enough to overshadow the news out of Japan, where the Nikkei fell 1.48% for the week after a volatile week. In individual stocks, women’s apparel specialist Lululemon had a tumultuous week and dropped 18.8% upon the news that CEO Christine Day will step down and that Dennis Wilson, Chairman and Co-Founder, sold over 600,000 shares of his stock last month. Looking forward, investors will pay close attention to any direction from Asian markets and hope for a more positive week.
The S&P 500® was down 1.0% for the week. The top-performing sectors in the S&P 500® Index included Telecommunications (1.4%) and Health Care (0.0%), while bottom-performing sectors included Energy (-1.7%) and Financials (-2.1%). In the fixed-income market, the 10-year Treasury yield fell during the week, ending at 2.1%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
Long-Term Plans
Founded in 1879 and based in San Ramon, California, Chevron Corporation (CVX) engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. It operates in two segments, Upstream, which involves the exploration, development and production of crude oil and natural gas and Downstream, which engages in the refining of crude oil into petroleum products. The company was formerly known as ChevronTexaco Corp. and changed its name to Chevron Corporation in May 2005.
Although CVX’s production growth forecast is muted over the next few years, we believe the anticipated addition of two natural gas fields in Australia during 2015 will change CVX’s growth profile dramatically. The change in production from these fields, as well as other projects CVX is undertaking, should drive a re-rating of the company to peer levels. The combination of higher production and the potential for higher valuation give Argent confidence that CVX represents favorable odds for our clients.
Top 10 Equity Holdings
| . | |
|---|---|
| Google, Inc. | 5.6% |
| Lowes Co. | 4.4% |
| CBS Corp. | 4.4% |
| Gilead Sciences | 4.1% |
| Danaher Corp. | 3.9% |
| SunTrust Banks | 3.8% |
| Forest Laboratories | 3.6% |
| Post Holdings Inc. | 3.5% |
| Oracle Corp. | 3.4% |
| Procter & Gamble | 3.4% |
U.S. Equity Indices
| Index | 06/14/13 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 15,070.0 | -1.2% | 15.0% |
| NASDAQ | 3,423.6 | -1.3% | 13.4% |
| S&P 500 | 1,626.7 | -1.0% | 14.1% |
| Russell 1000 G | 740.8 | -1.0% | 12.6% |
U.S. Credit Rates
| Index | 06/14/13 | 06/07/13 | 12/31/12 |
|---|---|---|---|
| 3 Month T-Bill | 0.1% | 0.1% | 0.1% |
| 5 Year T-Note | 1.0% | 1.1% | 0.8% |
| 10 Year T-Note | 2.1% | 2.2% | 1.8% |
| 30 Year T-Bond | 3.3% | 3.4% | 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.
