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News & Our Thinking

Weekly Investor

Weekly Investor – April 27, 2015

30 April 2015

 

A Positive Week

U.S. equity markets ended the week in positive territory and the S&P 500® Index rose 1.45%.  The big news of the week centered on events of the past.  It was announced that a British trader name Navinder Singh Sarao caused the Flash Crash of 2010 from the comforts of his parents’ home.  He is accused of entering false trades before cancelling them to indicate nonexistent interest in a practice known as “spoofing”.  This accusation was met with skepticism by investors as many questioned whether one trader could have been solely responsible for a 6% drop in the S&P 500.  Specific to company news, Google announced its intention of creating a wireless cellular network partnership with T-Mobile and Sprint. Shares in T-Mobile and Sprint responded favorably to the news.  Additionally, Teva Pharmaceutical made an unsolicited $82 per share offer for rival, Mylan.  Looking ahead to this week, investors will continue to digest corporate earnings reports and hope for another positive week.

The S&P 500® was up 1.8% for the week.  The top-performing sectors in the S&P 500® Index included Technology (4.1%) and Telecommunications (3.4%), while bottom-performing sectors included Consumer Staples (0.1%) and Energy (0.0%). In the fixed-income market, the 10-year Treasury yield was even during the week, ending at 1.9%.

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


Higher Demand

Lincoln National Corporation (LNC) engages in multiple life insurance and retirement businesses within the United States and sells a range of wealth protection, accumulation and retirement income products and solutions. LNC was founded in 1904 and is headquartered in Radnor, Pennsylvania.

Similar to its industry peers, LNC’s profit has been significantly impacted by the low interest rate environment. However, improving economic signals are currently leading the Federal Reserve to slowly reverse its monetary policy. This change should lead to a gradual climb in interest rates and thus a much improved operating environment for LNC. Additionally, the improving U.S. economy indicates higher potential demand for LNC’s products.  We believe LNC is well positioned to benefit from steady U.S. economic improvement and offers favorable odds to our clients.

Top 10 Equity Holdings


.
Electronic Arts, Inc. 5.4%
Google, Inc. 5.2%
Skyworks Solutions 5.1%
Teva Pharmaceutical 4.6%
CBS Corporation 4.1%
Post Holdings, Inc. 3.9%
Danaher Corp. 3.7%
Broadcom Corporation 3.6%
Lincoln National 3.5%
5F Networks, Inc. 3.4%

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.