News & Our Thinking

Weekly Investor

Weekly Investor – December 29, 2014

30 December 2014


A Present for Investors

U.S. equity markets ended the holiday-shortened week on a high note.  The S&P 500® Index returned 0.89% last week, closing at all-time highs for the second time this month.   Strength in U.S. equity markets comes amidst the turmoil in Russia and ongoing struggle in domestic oil markets, which have also hindered parts of the global economy.  U.S. economic news was mixed for the week and sales of previously owned homes and the Durable Goods report both failed to meet expectations.  However, Personal Income and Consumption beat expectations, most likely due to the rise in retail sales and falling gasoline prices.  Finally, Real GDP was ahead of consensus estimates and jobless claims fell to the lowest point since early November.  As investors prepare to close out 2014, they hope for more presents from the market this week.

The S&P 500® was up 0.9% for the week.  The top-performing sectors in the S&P 500® Index included Utilities (3.7%) and Consumer Discretionary (1.9%), while bottom-performing sectors included Energy (-0.6%) and Health Care (-2.0%). In the fixed-income market, the 10-year Treasury yield was up during the week, ending at 2.3%.

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

Turnaround Effort

Teva Pharmaceutical Industries Ltd. (TEVA) develops, manufactures, sells and distributes pharmaceutical products worldwide.  Founded in 1901, TEVA offers generic pharmaceutical products as well as specialized product families and is headquartered in Petach Tikva, Israel.  TEVA produces well known pharmaceuticals such as Copaxone for the treatment of multiple sclerosis, Azilect for the treatment of Parkinson’s and Treanda for the treatment of leukemia and non-Hodgkins lymphoma.

Over the past few years, shares of TEVA have been depressed due to several execution issues within the company.  However, TEVA is now in the midst of a turnaround effort led by a new CEO who is focused on improving operations and rebuilding the company’s pipeline through a series of acquisitions and internal development.   For these reasons, we have added TEVA to our portfolio as we believe it offers favorable odds.

Top 10 Equity Holdings

Google, Inc. 5.2%
Electronic Arts, Inc. 4.6%
Skyworks Solutions 4.3%
Danaher Corp. 4.0%
CBS Corp. 3.8%
F5 Networks, Inc. 3.8%
Lincoln National 3.8%
Broadcom Corporation 3.7%
EMC Corporation 3.3%
JP Morgan Chase & Co. 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.