News & Our Thinking

Weekly Investor

Weekly Investor – September 28, 2015

30 September 2015


A Less Than Stellar Week

Treasury prices fluctuated throughout the week and the S&P 500 fell 1.4% as investors continue to digest the Federal Reserve’s decision to leave rates unchanged. Last week’s Existing Home Sales report registered a decline of 4.8% for August which was below expectations. New single-family home sales were up 5.7%, however, exceeding expectations and the median price was up slightly though the average price fell some. All in all it was a mixed picture from a very volatile part of the economy. Looking ahead, investors will be paying close attention to jobs reports from ADP and the Department of Labor. Focus will continue to remain on China for any sign that the country’s economy might stabilize as investors prepare to close out the third quarter of 2015.

The S&P 500® was down 1.4% for the week. The top-performing sectors in the S&P 500® Index included Utilities (1.2%) and Consumer Staples (0.7%), while bottom-performing sectors included Basic Materials (-4.0%) and Health Care (-5.8%). In the fixed-income market, the 10-year Treasury yield was up during the week, ending at 2.2%.

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

Positioned to Benefit

Google, Inc. (GOOG) has achieved worldwide name recognition with its famed Google search engine. Beyond this well-known service, the technology company also provides targeted advertising solutions (Google AdSense), a checkout service for merchants (Google Checkout), collaboration tools for organizations (Google Apps), and a host of additional online utilities such as Google Maps, Google Video, Google Docs, Google Toolbar, Google Desktop, Google Reader, and of course Gmail. This Mountain View, California based company was founded in 1998, and prides itself on maintaining a corporate culture that encourages creativity and community.

We believe the current trend of allocating additional advertising dollars to internet search ads will continue, and that GOOG is well-positioned to benefit from this trend. With its sophisticated search engine, GOOG is able to proficiently match buyers to providers. Providers recognize the attractiveness of this service and are willing to pay for it accordingly. Recently, near-term economic conditions have placed pressure on GOOG’s stock, which has opened the door for long-term investors such as our clients. We believe the company will outperform its peers over the next three to five years.

Top 10 Equity Holdings

Google, Inc. 6.0%
Post Holdings, Inc. 5.7%
Teva Pharmaceutical 4.4%
Electronic Arts, Inc. 4.2%
Skyworks Solutions 4.1%
ConAgra Foods, Inc. 3.9%
Danaher Corp. 3.9%
Expedia, Inc. 3.6%
F5 Networks, Inc. 3.3%
C.H. Robinson 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.