News & Our Thinking

Weekly Investor

Weekly Investor – March 30, 2015

31 March 2015


A Troubled Week

U.S. equity markets lost ground last week and the S&P 500® Index returned -2.2%, marking the second worst week of 2015.  Additionally, the S&P 500 has now gone 28 consecutive trading sessions without posting back to back gains, the longest streak of this occurrence since 1994.  Federal Reserve Chairwoman, Janet Yellen tried to reassure investors by stating that once the Fed Fund rate is lifted, subsequent raises should be slow.  U.S. economic data was mixed for the week.  Fourth quarter 2014 Gross Domestic Product (GDP) growth was announced on Friday at 2.2% and consumer spending saw the largest gain in eight years.  Additionally, new home sales climbed to a seven year high and jobless claims fell to their lowest level in five weeks. However, the Philadelphia Stock Exchange Semiconductor Index dropped 5% during the week, the largest weekly drop since October.  Looking ahead to this week, investors will close out the first quarter of 2015 and will eagerly await results from Corporate America.

The S&P 500® was down 2.2% for the week.  The top-performing sectors in the S&P 500® Index included Consumer Staples (-0.4%) and Energy (-0.7%), while bottom-performing sectors included Industrials (-2.7%) and Financials (-3.0%). In the fixed-income market, the 10-year Treasury yield was up during the week, ending at 2.0%.

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

High Profit & Growth Potential

F5 Networks, Inc. develops and sells products which help organizations address the growth of voice, data and video traffic to better support mobile workers and business IT infrastructure. FFIV was founded in 1996 and is headquartered in Seattle, Washington.

We have added FFIV to our portfolio as we believe the company is well positioned to benefit from the accelerating growth of mobile internet traffic. FFIV’s products help manage and protect traffic networks, enabling users more efficient and secure internet usage. Additionally, FFIV recently partnered with Cisco (CSCO) in order to provide a joint enterprise application which will improve deployment times for key business applications.   With its superior technology and market share leader position, we believe FFIV has the potential to deliver higher than expected profits and growth going forward, offering favorable odds to our clients.

Top 10 Equity Holdings

Skyworks Solutions 5.5%
Electronic Arts, Inc. 5.4%
Google, Inc. 5.1%
Teva Pharmaceutical 4.5%
CBS Corporation 4.0%
Post Holdings, Inc. 3.9%
Danaher Corp. 3.8%
Broadcom Corporation 3.5%
Mallinckrodt plc 3.5%
Lincoln National 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.