Weekly Investor – May 4, 2015
GDP Growth Disappoints
U.S. equity markets ended the week down. Although the S&P 500® Index had a positive month in April, the index slid to close last week at -0.42%. First quarter 2015 GDP growth came in at 0.2% and disappointed investors as annualized GDP reports have now registered two consecutive quarters of declining growth. This slowing growth complicates the decision by the Federal Reserve on when to raise rates. However, there was still good news to be had. U.S. initial jobless claims came in at 262k, much lower than the previous week’s 295k and consensus estimates of 290k. Crude oil prices increased 3.5% from the previous week, closing at $59 per barrel. Finally, positive performance amongst the ten economic sectors was split. Five had positive performance for the week while five performed negatively. Looking ahead to this week, investors prepare to digest more earnings reports and hope economic news is positive.
The S&P 500® was down 0.4% for the week. The top-performing sectors in the S&P 500® Index included Basic Materials (2.0%) and Energy (1.1%), while bottom-performing sectors included Consumer Discretionary (-1.6%) and Health Care (-2.3%). In the fixed-income market, the 10-year Treasury yield was up during the week, ending at 2.1%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
Attractive Risk/Reward Profile
Lowe’s Companies, Inc. (LOW) operate as a home improvement retailer. The company offers a range of products for repair, remodeling, home decorating, and property maintenance.
LOW’s has recently implemented a new strategy that focuses on slowing store growth and improving store productivity and margins. LOW’s also plans to return capital back to investors through substantial share buyback offers. We believe the new strategy will be successful and offers an attractive risk / reward profile for our portfolio.
Top 10 Equity Holdings
| . | |
|---|---|
| Skyworks Solutions | 5.5% |
| Electronic Arts, Inc. | 5.5% |
| Google, Inc. | 5.0% |
| Teva Pharmaceutical | 4.5% |
| CBS Corporation | 4.1% |
| Post Holdings, Inc. | 3.8% |
| Broadcom Corporation | 3.7% |
| Danaher Corp. | 3.7% |
| Lincoln National | 3.6% |
| 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.
