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News & Our Thinking

Weekly Investor

Weekly Investor – July 6, 2015

08 July 2015

 

No Fireworks for the Market

Unlike the fireworks which soared across our skies last week, U.S. equities markets fell short.  The S&P 500® Index returned -1.55% for the week and headlines were dominated by the continued financial trouble in Greece. When bailout talks between Greece and creditors deteriorated, Greece took action to control capital flows by closing banks and imposing a €60 per day cash withdrawal limit at ATMs.  A vote on a referendum to accept or reject the latest round of negotiations happened yesterday and the people of Greece rejected the proposed austerity measures in return for emergency funds.  Investors worry this no vote is a trigger for Greece to begin exiting the Eurozone.  In other news, oil dropped 5% last week and poor U.S. employment data decreased opportunity for the Federal Reserve to raise interest rates sooner than expected.  Looking ahead, investors hope good news from Corporate America can help overshadow headwinds from Europe.

The S&P 500® was down 1.2% for the week.  The top-performing sectors in the S&P 500® Index included Utilities (1.1%) and Consumer Staples (-0.5%), while bottom-performing sectors included Energy (-2.0%) and Basic Materials (-2.5%). In the fixed-income market, the 10-year Treasury yield was down during the week, ending at 2.4%.

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


Positive Industry Trends

C.H. Robinson Worldwide, Inc. (CHRW) is a third party logistics company which provides freight transportation services and solutions to various industries worldwide. CHRW was founded in 1905 and is headquartered in Eden Prairie, Minnesota.

As a best-in-breed third party logistics company, we believe CHRW has the opportunity to take advantage of favorable conditions within the North American trucking industry. In fact, our Main Street Contacts have confirmed several positive industry trends for CHRW including strong trucking pricing and the need for additional trucking capacity within North America. Improving U.S. economic growth only boosts the opportunity for these trends to continue. In addition, CHRW recently acquired Freightquote.com, further solidifying the company’s commitment to grow its market share by gaining exposure to increasing segments of the logistics market. We believe positive industry conditions coupled with CHRW’s best-in-breed status provide favorable odds for our portfolio.

Top 10 Equity Holdings


.
Electronic Arts, Inc. 6.0%
Google, Inc. 4.8%
Skyworks Solutions 4.6%
Teva Pharmaceutical 4.3%
Post Holdings, Inc. 4.2%
Danaher Corp. 3.7%
CBS Corporation 3.5%
Lincoln National 3.5%
JP Morgan Chase & Co. 3.3%
ON Semiconductor 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.