News & Our Thinking

Weekly Investor

Weekly Investor – September 9, 2013

17 September 2013

Good News

Market Summary:  

U.S. equity markets ended the holiday shortened week in positive territory as economic data trumped the uncertainty surrounding Syria. The much anticipated jobs report came in slightly worse than expected, adding 169,000 jobs versus the expected estimate of 180,000.  However, this report was viewed positively by investors as the beginning of the Fed’s tapering could be prolonged due to the unclear labor picture.  Additionally, the ISM Manufacturing Index posted its strongest results since June 2011 as U.S. producers lead the global recovery.  Looking ahead, investors will be focuses on a possible vote by congress to authorize a military strike against Syria.

The S&P 500® was up 0.9% for the week.  The top-performing sectors in the S&P 500® Index included Health Care (1.3%) and Technology (1.2%), while bottom-performing sectors included Telecommunications (0.3%) and Utilities (0.0%). In the fixed-income market, the 10-year Treasury yield was up during the week, ending at 2.9%.

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

Favorable Odds

JECJacobs Engineering Group Inc. (JEC) provides professional, technical, and construction services. Founded in 1947 and headquartered in Pasadena, CA, JEC is one of the largest and most diverse engineering and construction companies in the U.S.  Its principal services comprise various aspects of engineering and construction, operations, and maintenance, as well as scientific and specialty consulting services. JEC’s end customers range from oil and gas companies to mining and healthcare companies.

Over the past 18 months, the operating environment of JEC’s customers has steadily improved and JEC is beginning to experience a pick up in orders and overall business.  JEC has a strong balance sheet, proven track record and an attractive valuation.  As business conditions continue to improve, we at Argent expect JEC to benefit materially from the trickle down effect of the recovering economy.  In other words, JEC represents favorable odds for our clients.

Top 10 Equity Holdings

Google, Inc. 5.3%
Lowes Cos 4.8%
CBS Corp. 4.7%
Gilead Sciences 4.6%
Danaher Corp 3.9%
SunTrust Banks 3.8%
Forest Laboratories 3.7%
MasterCard, Inc. 3.6%
Qualcomm Inc. 3.6%
Citrix Systems, Inc. 3.5%

U.S. Equity Indices

Index 09/06/13 Week % Chg YTD % Chg
DJIA 14,922.5 0.6% 13.9%
NASDAQ 3,660.0 1.3% 21.2%
S&P 500 1,655.2 0.9% 16.1%
Russell 1000 G 764.5 1.0% 16.2%

U.S. Credit Rates

Index 09/06/13 08/30/13 12/31/12
3 Month T-Bill 0.1% 0.1% 0.1%
5 Year T-Note 1.8% 1.6% 0.8%
10 Year T-Note 2.9% 2.8% 1.8%
30 Year T-Bond 3.9% 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.