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News & Our Thinking

Weekly Investor

Weekly Investor – July 20, 2015

21 July 2015

 

Earnings Save the Day!

U.S. equity markets ended the week in positive territory.  The S&P 500® Index returned 2.4%, the best weekly return for the index since March.  Strong corporate earnings and headlines that Greece struck a short-term deal with creditors boosted investor confidence and markets.  In economic news, retail sales for June declined 0.3% and came in below consensus expectations.  This surprised Wall Street as stronger employment, improving consumer balance sheets and cheap energy had many analysts anticipating a retail expansion.  In company news, shares of Google Inc. (GOOG) rose over 16% on Friday as new CFO, Ruth Porat, unveiled a five point plan for more disciplined spending and a focus on growth of core earnings.  Investors and analysts approved of her plan.  Looking ahead to this week, several large companies are set to announce second quarter earnings and investors will pay close attention.

The S&P 500® was up 2.4% for the week.  The top-performing sectors in the S&P 500® Index included Technology (5.3%) and Financials (3.0%), while bottom-performing sectors included Basic Materials (-0.1%) and Energy (-1.2%). In the fixed-income market, the 10-year Treasury yield was down during the week, ending at 2.3%.

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


Turn Around Effort

CBS Corporation (CBS) operates a worldwide mass media company and is headquartered in New York, New York. Founded in 1986, CBS has operations in every field of media including broadcast television, cable television, radio, outdoor advertising, publishing, interactive media, and entertainment.

Recently, a structural change between content providers, such as CBS, and distributors, such as cable and satellite operators, has provided additional profitability for CBS. CBS now has the ability to leverage the value of its content when negotiating retransmission fees. In addition, increased demand for online content from video distributors such as Netflix provide a new and meaningful growth source for CBS. We expect CBS will successfully continue to generate value from its content, therefore creating favorable odds for our clients.

Top 10 Equity Holdings


.
Electronic Arts, Inc. 6.3%
Google, Inc. 6.0%
Skyworks Solutions 4.4%
Teva Pharmaceutical 4.3%
Post Holdings, Inc. 4.2%
Danaher Corp. 3.7%
Lincoln National 3.4%
CBS Corporation 3.4%
JP Morgan Chase & Co. 3.3%
The Hain Celestial Group 3.2%

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.