Weekly Investor – July 15, 2013
A Great Week for Investors
Market Summary:
The U.S. equity markets all posted strong gains last week and the S&P 500® Index touched record highs mid-week. The rally in equities came after Fed Chairman, Ben Bernanke, stated that the highly accommodative Fed policy is needed for the foreseeable future. This news delighted investors who were previously hesitant about the impact of any Fed tapering. While China reported weaker than expected export data, it was not enough to deflate investor confidence in the U.S. markets. Additionally, earnings season started out strong with JP Morgan Chase & Co. (JPM) reporting a 31% jump in profits, a positive sign for banks. Looking ahead to this week, investors are focused on Bernanke’s testimony in front of Congress and hope for continued positive earnings.
The S&P 500® was up 3.0% for the week. The top-performing sectors in the S&P 500® Index included Utilities (4.7%) and Consumer Staples (3.6%), while bottom-performing sectors included Energy (2.5%) and Telecommunications (0.2%). In the fixed-income market, the 10-year Treasury yield was down during the week, ending at 2.6%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
New Execution Strategy
Endo Health Solutions Inc. (ENDP) provides specialty healthcare solutions in the United States and internationally. ENDP was formerly known as Endo Pharmaceuticals Holdings Inc. and changed its name to Endo Health Solutions Inc. in May 2012. ENDP was founded in 1997 and is headquartered in Malvern, Pennsylvania.
In recent years, ENDP has been struggling with the successful execution of its pipeline across its multiple business segments. The company recently named Rajiv De Silva as CEO in an effort to help execution. Prior to joining ENDP, De Silva was an executive at Valeant Pharmaceuticals and assisted in the significant growth of the company. We expect Rajiv to exercise his successful track record of creating shareholder value through his operational focus and value-added M&A background to ENDP. For these reasons, we believe ENDP offers favorable odds to our clients.
Top 10 Equity Holdings
| . | |
|---|---|
| Google, Inc. | 5.6% |
| CBS Corp. | 4.6% |
| Lowes Cos | 4.6% |
| Gilead Sciences | 4.3% |
| Danaher Corp. | 4.0% |
| SunTrust Banks | 3.9% |
| Forest Laboratories | 3.7% |
| MasterCard, Inc. | 3.4% |
| Procter & Gamble | 3.4% |
| Post Holdings Inc. | 3.4% |
U.S. Equity Indices
| Index | 07/12/13 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 15,464.3 | 2.2% | 18.0% |
| NASDAQ | 3,600.1 | 3.5% | 19.2% |
| S&P 500 | 1,680.2 | 3.0% | 17.8% |
| Russell 1000 G | 766.3 | 3.1% | 16.4% |
U.S. Credit Rates
| Index | 07/12/13 | 07/05/13 | 12/31/12 |
|---|---|---|---|
| 3 Month T-Bill | 0.1% | 0.1% | 0.1% |
| 5 Year T-Note | 1.4% | 1.6% | 0.8% |
| 10 Year T-Note | 2.6% | 2.7% | 1.8% |
| 30 Year T-Bond | 3.6% | 3.7% | 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.
